Factor substitution among real and financial assets in Brazilian manufacturing firms

Gregory A. Falls, Pauls A. Natke

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

Using a translog cost function and Brazilian firm level data, this article examines the degree of substitution between inputs. The two most important results of this analysis are that liquid assets do not generally substitute for either physical capital or labor and the monetary transmission mechanism operating through the Brazilian manufacturing sector is rather weak. The outcomes suggest changes in the Brazilian money supply will elicit only small substitution of money for either labor or physical capital.

Original languageEnglish
Pages (from-to)213-225
Number of pages13
JournalQuarterly Review of Economics and Finance
Volume34
Issue number2
DOIs
StatePublished - 1994

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