Use of Cobb-Douglas production model on some selected manufacturing industries in Oman

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

Purpose – The main purpose of this paper is to select the most suitable production model for measuring the production process of some major manufacturing industries in Oman. Design/methodology/approach – This empirical paper looks into an analytical justification to use CobbDouglas (CD) production model in order to estimate and test the coefficients of the production inputs for each of the selected manufacturing industries using annual industrial statistical data over the period 1994 through 2007 published by Ministry of Commerce and Industry, Sultanate of Oman. Findings – The results of the paper indicate that for most of the selected industries the CD function fits the data very well in terms of labor and capital elasticity, return to scale measurements, standard errors, economy of the industries, high value of R2 and reasonably good DurbinWatson statistics. The estimated results suggest that the manufacturing industries of Oman generally seem to indicate the case of increasing return to scale. Of the nine industries, seven exhibit increasing return to scale and only the rest two show decreasing return to scale. The paper finds no industry with constant return to scale. Research limitations/implications – The paper could not consider a good number of manufacturing industries and a long period of time series data in the study because of lack of data availability. Practical implications – Recently, businessmen as well as industrialists are very much concerned about the theory of firm in order to make correct decisions regarding what items, how much and how to produce them. All these decisions are directly related with the cost considerations and market situations where the firm is to be operated. In this regard, this paper should be helpful in suggesting the most suitable functional form of production process for the major manufacturing industries of developing countries like Oman. Originality/value – The paper shows originality in substance and makes a unique contribution to the literature on industrial economics in Oman.

Original languageEnglish
Pages (from-to)78-85
Number of pages8
JournalEducation, Business and Society: Contemporary Middle Eastern Issues
Volume3
Issue number2
DOIs
Publication statusPublished - Jun 1 2010

Fingerprint

Oman
manufacturing industry
industry
production process
firm
businessman
commerce
ministry
time series
statistics
Industry
Manufacturing industries
Cobb-Douglas
developing country
labor
economy
lack
methodology
market
costs

Keywords

  • Capital
  • Econometrics
  • Functional analysis
  • Labour
  • Oman
  • Production processes

ASJC Scopus subject areas

  • Education
  • Business, Management and Accounting(all)

Cite this

@article{d422feeddc9d4f9b8d5600b5731f8cd2,
title = "Use of Cobb-Douglas production model on some selected manufacturing industries in Oman",
abstract = "Purpose – The main purpose of this paper is to select the most suitable production model for measuring the production process of some major manufacturing industries in Oman. Design/methodology/approach – This empirical paper looks into an analytical justification to use CobbDouglas (CD) production model in order to estimate and test the coefficients of the production inputs for each of the selected manufacturing industries using annual industrial statistical data over the period 1994 through 2007 published by Ministry of Commerce and Industry, Sultanate of Oman. Findings – The results of the paper indicate that for most of the selected industries the CD function fits the data very well in terms of labor and capital elasticity, return to scale measurements, standard errors, economy of the industries, high value of R2 and reasonably good DurbinWatson statistics. The estimated results suggest that the manufacturing industries of Oman generally seem to indicate the case of increasing return to scale. Of the nine industries, seven exhibit increasing return to scale and only the rest two show decreasing return to scale. The paper finds no industry with constant return to scale. Research limitations/implications – The paper could not consider a good number of manufacturing industries and a long period of time series data in the study because of lack of data availability. Practical implications – Recently, businessmen as well as industrialists are very much concerned about the theory of firm in order to make correct decisions regarding what items, how much and how to produce them. All these decisions are directly related with the cost considerations and market situations where the firm is to be operated. In this regard, this paper should be helpful in suggesting the most suitable functional form of production process for the major manufacturing industries of developing countries like Oman. Originality/value – The paper shows originality in substance and makes a unique contribution to the literature on industrial economics in Oman.",
keywords = "Capital, Econometrics, Functional analysis, Labour, Oman, Production processes",
author = "{Zakir Hossain}, Mohammad and {Said Al-Amri}, Khalid",
year = "2010",
month = "6",
day = "1",
doi = "10.1108/17537981011047925",
language = "English",
volume = "3",
pages = "78--85",
journal = "Education, Business and Society: Contemporary Middle Eastern Issues",
issn = "1753-7983",
publisher = "Emerald Group Publishing Ltd.",
number = "2",

}

TY - JOUR

T1 - Use of Cobb-Douglas production model on some selected manufacturing industries in Oman

AU - Zakir Hossain, Mohammad

AU - Said Al-Amri, Khalid

PY - 2010/6/1

Y1 - 2010/6/1

N2 - Purpose – The main purpose of this paper is to select the most suitable production model for measuring the production process of some major manufacturing industries in Oman. Design/methodology/approach – This empirical paper looks into an analytical justification to use CobbDouglas (CD) production model in order to estimate and test the coefficients of the production inputs for each of the selected manufacturing industries using annual industrial statistical data over the period 1994 through 2007 published by Ministry of Commerce and Industry, Sultanate of Oman. Findings – The results of the paper indicate that for most of the selected industries the CD function fits the data very well in terms of labor and capital elasticity, return to scale measurements, standard errors, economy of the industries, high value of R2 and reasonably good DurbinWatson statistics. The estimated results suggest that the manufacturing industries of Oman generally seem to indicate the case of increasing return to scale. Of the nine industries, seven exhibit increasing return to scale and only the rest two show decreasing return to scale. The paper finds no industry with constant return to scale. Research limitations/implications – The paper could not consider a good number of manufacturing industries and a long period of time series data in the study because of lack of data availability. Practical implications – Recently, businessmen as well as industrialists are very much concerned about the theory of firm in order to make correct decisions regarding what items, how much and how to produce them. All these decisions are directly related with the cost considerations and market situations where the firm is to be operated. In this regard, this paper should be helpful in suggesting the most suitable functional form of production process for the major manufacturing industries of developing countries like Oman. Originality/value – The paper shows originality in substance and makes a unique contribution to the literature on industrial economics in Oman.

AB - Purpose – The main purpose of this paper is to select the most suitable production model for measuring the production process of some major manufacturing industries in Oman. Design/methodology/approach – This empirical paper looks into an analytical justification to use CobbDouglas (CD) production model in order to estimate and test the coefficients of the production inputs for each of the selected manufacturing industries using annual industrial statistical data over the period 1994 through 2007 published by Ministry of Commerce and Industry, Sultanate of Oman. Findings – The results of the paper indicate that for most of the selected industries the CD function fits the data very well in terms of labor and capital elasticity, return to scale measurements, standard errors, economy of the industries, high value of R2 and reasonably good DurbinWatson statistics. The estimated results suggest that the manufacturing industries of Oman generally seem to indicate the case of increasing return to scale. Of the nine industries, seven exhibit increasing return to scale and only the rest two show decreasing return to scale. The paper finds no industry with constant return to scale. Research limitations/implications – The paper could not consider a good number of manufacturing industries and a long period of time series data in the study because of lack of data availability. Practical implications – Recently, businessmen as well as industrialists are very much concerned about the theory of firm in order to make correct decisions regarding what items, how much and how to produce them. All these decisions are directly related with the cost considerations and market situations where the firm is to be operated. In this regard, this paper should be helpful in suggesting the most suitable functional form of production process for the major manufacturing industries of developing countries like Oman. Originality/value – The paper shows originality in substance and makes a unique contribution to the literature on industrial economics in Oman.

KW - Capital

KW - Econometrics

KW - Functional analysis

KW - Labour

KW - Oman

KW - Production processes

UR - http://www.scopus.com/inward/record.url?scp=84864292927&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84864292927&partnerID=8YFLogxK

U2 - 10.1108/17537981011047925

DO - 10.1108/17537981011047925

M3 - Article

VL - 3

SP - 78

EP - 85

JO - Education, Business and Society: Contemporary Middle Eastern Issues

JF - Education, Business and Society: Contemporary Middle Eastern Issues

SN - 1753-7983

IS - 2

ER -