Trend of Technological Change in Iran's Petrochemical Industry

Abstract

Nowadays, using appropriate technologies in order to make production economic and increase productivity of producing factors can be resulted optimized factors employing and also production enhancement in factories. Technological change is considered as one of the main factors of productivity growth. In this paper we have studied on the trend and bias of technological change in Iran's petrochemical industry by econometric approach from 1979 to 2008. We estimated a translog cost function in addition to equations system of cost share, using Seemingly Unrelated Regressions (SUR) approach. The results show that the rate of technological change has been -0.974 percent during the studied years. It means that there is a decrease in rate of cost of productive units during that period. Furthermore, the results indicate that technological change has been biased towards the use of more labor and material, while capital and energy have been saved.