Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5084234 | International Review of Economics & Finance | 2007 | 14 Pages |
Abstract
This paper examines cost relationships in the French automobile industry using a translog cost function with domestic capital and labor and domestic and foreign intermediate goods inputs. The findings suggest scale economies at lower output levels, but diseconomies at mean and maximum output levels. Cross price elasticity estimates implied all input pairs except capital and foreign parts and labor and domestic parts are substitutes. Except for foreign components, direct price elasticity estimates were inelastic. Thus, further integration of Europe and reduction of foreign input prices may substantially increase their quantity demanded and decrease the demand for domestic labor and parts.
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Authors
Lila J. Truett, Dale B. Truett,