Assessing The Role Of Technology In The Cobb-Douglas Production Function: Evidence From India’s Major Industries

Abstract

The paper aims to estimate the Cobb- Douglas production function for major industries, as given in ASI (An- nual Survey of Industries India). The function was assessed for twenty-nine (two-digit) Industries from 2011 to 2021 with time trend and without time trend. It is observed that (a) there are inter-industry differences in efficiency parameters, the highest efficiency was observed in other non-metallic mineral products industry in both cases, (b) more than sixty per cent of industries observed with positive exponents of labour and capital in contrast to approximately forty-one per cent in production function with time trend(c) except eight industries in total, remaining all the industries exhibiting increasing returns in Cobb – Douglas production function without technological change. Only eight industries indicated strong returns with the technological change (time trend).

(d) the upper three industries with the highest growth rate of technological change were showing decreasing returns to scale.