Capital Labour Substitution in the Large-scale Food-processing Industry in Pakistan: Some Recent Evidence
Food-processing is one of the first industries developed by man. Most agricultural commodities require some sort of processing for them to be edible. In primitive societies man processed his own food using the simple mortar and pestle. With the advent of industrialisation there emerged important implications for foodprocessing technologies. The workers in the industrial and commercial sectors of urban areas required greater supplies of food. This encouraged the establishment of processing plants supplemented by storage facilities to ensure that the urban population received the food that they required. Food-processing, therefore, began to occupy a fairly predominant position in the overall industrial sector. Its importance was heightened by its strong backward and forward linkages with the rest of the economy. In a labour-surplus developing economy, where most of the labour is unemployed or underemployed, the absorption of this surplus labour force in the industrial sector is an important issue. In recent decades, there has been significant growth in the industrial sector in most developing countries, in terms of both
IDENTIFICATION AND ESTIMATION OF ELASTICITIES OF SUBSTITUTION FOR FIRM-LEVEL PRODUCTION FUNCTIONS USING AGGREGATIVE DATA
Firm-level stochastic CES and YES production functions are defined and conditions are specified such that elasticities of substitution can be identified and efficiently estimated from aggregative data on firms within different asset-size categories. Attention is given to the estimation of production functions using cross-sectional and time-series data. The sufficient conditions specify that levels of factors of production be the same for firms within designated categories.
Employment Aspects of Industrial Growth.A Correction
In the Summer 1974 edition of the Pakistan Development Review. Mr. Ishrat Hussain wrote an article on an aspect of Pakistan's industrialization that has aroused considerable interest and concern in other developing countriesthe impact of technology and wage rate changes on the growth of industrial employment [2. 3 & 6]. While commending Mr. Hussain's efforts in having drawn attention to this aspect of our industrial strategy, it appears necessary to point out that his analysis contains an important error in the basic data. This note therefore is intended to correct the error in the data, rework the entire analysis, and suggest reasons why the conclusions drawn by Mr. Hussain are not warranted by the evidence he presents.