Pakistan Institute of Development Economics



An Analysis of Production Relations in the Large-scale Textile Manufacturing Sector of Pakistan

This paper attempts to determine econometrically the underlying production relations for the large-scale textile manufacturing sector of Pakistan, based on data available from the siX most recent censuses of large-scale manufacturing industries. The cOllariance model is used for pooling the provincial data. Testing for alternative forms reveals that the CES production function with constant-returns-to-scale most adequately explains the underlying production structure. The estimates of the elasticity of substitution are significantly different from zero in all cases, implying significant and efficient employment generation possibilities.

Sohail J. Malik, Hina Nazli, Mohammad Mushtaq

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