Abstract:This paper performs a nonlinear estimation of a normalized CES production function within a system of equations with a panel of Spanish regions for the period 1964-2013. It obtains an elasticity of substitution below one and identifies different rates of factor-augmenting technical progress. The results support for labor-saving innovations hypothesis for the Spanish case. Nevertheless, they do not support a relationship between the elasticity of substitution and the initial regional capital per worker. The res… Show more
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