capital-labour ratio

capital-labour ratio

the proportion of CAPITAL to LABOUR inputs in an economy If capital inputs in the economy increase over time at the same rate as the labour input, then the capital-labour ratio remains unchanged (see CAPITAL WIDENING). If capital inputs increase at a faster rate than the labour input, then CAPITAL DEEPENING takes place. The capital-labour ratio is one element in the process of ECONOMIC GROWTH. See CAPITAL-INTENSIVE FIRM/INDUSTRY, LABOUR-INTENSIVE FIRM/INDUSTRY, AUTOMATION.
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where A - the constant term (shift factor); LPGDP - natural log of per-capita output (GD[P.sub.t] / [L.sub.t]) (in RM thousand per people); LCPW - natural log of capital-labour ratio ([P.sub.t] / [L.sub.t]) (in USD thousand per people); LINV - natural log of EPF investment funds (in RM billion); LCONR - natural log of EPF contribution rates (in percentage); LURB - natural log of urbanization (in million people); LFERT - natural log of fertility rate (in number of births per woman); LDEPR - natural log of dependency ratio (in percentage retired-to-working groups); LOAGES - natural log of old ages group (in percentage of total population).
He identifies weak international connections, the geographical segregation of domestic markets and their small size, and a low capital-labour ratio as factors that have contributed to weak productivity growth.
The socioeconomic variables included in our model are energy prices, income, capital-labour ratio, investment ratio, population growth, weather, and control variables for policy.
(1961), in a linearly homogeneous production function marginal productivity of labour is an increasing function of capital-labour ratio. Usually some other variables like human capital, innovation, trade openness, research and development are included in the model along with capital-labour ratio to analyse determinants of labour productivity [see for example, Velucchi and Viviani (2011); Han, Kauffman, and Nault (2011); Hussain (2009); Apergis, et al.
The equilibrium gross wage composite becomes slightly higher after the lower migration shock, due to the reduction in overall labour supply, which leads to a higher capital-labour ratio. But this effect does not persist for long; as the capital-labour ratio adjusts back to its equilibrium level, the positive gross wage differential disappears by the end of the simulation period.
A conservative assessment by Louis Kuijs, working with the World Bank, shows that, from 1978 to 1994, China's GDP grew by an average of 9.9% annually, labour productivity increased by 6.4%, TFP rose by 3% and the capital-labour ratio increased by 2.9%.
The capital-labour ratio at time t is denoted by k(t) and serves as the state variable of the model.
In the present study, capital-labour ratio was taken as a measure of capital intensity.
Consistent with trade theories, firms with lower capital-labour ratio, higher return on sales, and larger firm size are found to have higher export propensity.
Because sales growth is a reflection of shortterm firm growth, and asset growth is a reflection of long-term firm growth, productivity and capacity utilization are, to a large extent, influenced by investments that increase growth and by the capital-labour ratio, which indicates that technology tends to be employed in fast-growing firms.
The nature of input technical bias can be assessed comparing the value of IBTCi,t+1 to the evolution of the capital-labour ratio (FARE et al., 1996):
Increasing the amount of capital equipment relative to labour used in production (capital-labour ratio) creates a capital deepening effect.