scholarly journals CAPITAL-LABOR RATIO IN UKRAINE’S MACHINE BUILDING: REALITY AND OPTIMALITY

2018 ◽  
Vol 2018 (8) ◽  
pp. 16-29 ◽  
Author(s):  
Oleksandr YANKOVYI ◽  
◽  
Volodymyr YANKOVYI ◽  
Keyword(s):  
Extreme Values ◽  
Machine Building ◽  
Production Functions ◽  
Positive Trend ◽  
Labor Costs ◽  
Marginal Rate ◽  
Labor Ratio ◽  
Capital Labor Ratio ◽  
Basic Production ◽  
Optimal Capital

The article examines the situation of appearance of a non-optimal capital-labor ratio on the basis of a comparison of the relative speed of the dynamics of indicators of labor productivity, capital productivity and capital-labor ratio in machine building industry of Ukraine in recent years. Mathematical determination of the optimal capital-labor ratio is substantiated on the basis of production functions taking into account dynamics of the most important indicators of economic activity, presented in value terms. Methodological and applied aspects of the use of the equimarginal principle from microeconomics are discussed to determine the optimal capital-labor ratio within the limits of substitutional production functions. It is proved that at the point of optimal capital-labor ratio, the marginal rate of replacement of production factors’ substitution is equal to one. The resulting conclusion is used as a basis for development of a procedure for finding optimum capital-labor ratio using econometric models, which adequately describe the relationship of time series of product sales, basic productive assets and labor costs based on substitutional production functions. The use of the proposed procedure for determining the optimal capital-labor ratio is carried out on the example of the Cobb-Douglas-Tinbergen production function, the dynamised CES-function and the linear function. The methodological recommendations on calculation of unknown parameters are presented for these functions, as well as the formulas of optimal capital-labor ratio with indicated extreme values of products sold and the total costs for basic production assets and labor payment. The obtained theoretical results are tested according to the data of Ukraine’s machine building. The hypothesis about non-optimal capital-labor ratio in 2007-2015 is confirmed in terms of volumes of sales of the industry production. It turns out that for the analyzed period of time, the basic production assets of machine building were relatively abundant compared with the payment of labor. In 2016-2017, a positive trend begins in dynamics of the capital-labor ratio in the industry to a certain reduction and a gradual approach to the optimal value.

scholarly journals OPTIMIZATION OF THE CAPITAL-LABOR RATIO OF INDUSTRIAL ENTERPRISES USING PRODUCTION FUNCTIONS

2019 ◽  
Vol 2019 (11-12) ◽  
pp. 34-48 ◽  
Author(s):  
Oleksandr YANKOVYI ◽  
◽  
Volodymyr YANKOVYI ◽  
Keyword(s):  
Machine Building ◽  
Production Functions ◽  
Production Factor ◽  
Analytical Determination ◽  
Marginal Rate ◽  
Industrial Enterprises ◽  
Labor Ratio ◽  
Capital Labor Ratio ◽  
Fixed Assets ◽  
Optimal Capital

Neglect of the issues of managing the capital-labor ratio at industrial enterprises and lack of information on the level of its difference from the optimal value are steadily leading to the irrational use of fixed assets and labor. This, in turn, inevitably manifests itself in decreasing competitiveness of individual domestic producers, their deteriorating financial situation and, ultimately, ends in bankruptcy. Thus, it is necessary to constantly monitor the occurrence of suboptimal capital-labor ratio, which is fraught with a relative overabundance of one of the most important production factors-resources and a decrease in the efficiency of using the other. The authors propose a procedure for the analytical determination of the optimal capital-labor ratio of a commodity producer using the marginal rate of technological substitution of resources based on dynamized production functions. This makes it possible to verify the scientific hypothesis of the relative redundancy of fixed assets compared to size of salary not only at the industry level, but also at individual machine-building and food enterprises. In particular, a number of agreed criteria for optimal capital-labor ratio (when the constructed production function adequately describes the time variation of the technical and economic indicators of the commodity producer) are justified and alternative management recommendations are developed in the case when the actual capital-labor ratio is not optimal at the enterprise. Testing of the developed theoretical and methodological provisions and practical recommendations at domestic enterprises in various industries showed that in recent years, enterprises of machine-building and food industry in Ukraine have seen a significant excess of fixed assets compared to labor remuneration. The actual excess of the required capital-labor ratio, that is, its sub-optimality in this period was formed under the influence of two main factors: (i) the presence at the industrial enterprises of a large amount of obsolete and worn-out technical and technological equipment that was used inefficiently; (ii) artificial understatement of the cost of the production factor “labor force”, manifested in the relatively low wages of staff remuneration of the enterprises under study.

Elasticity of Labor Productivity by Production Factors in the Regions of Russia

2020 ◽  
Vol 8 (6) ◽  
pp. 18-21
Author(s):  
Elena Basovskaya ◽  
Leonid Basovskiy
Keyword(s):  
Labor Productivity ◽  
Price Index ◽  
Production Functions ◽  
Regression Equations ◽  
Cross Sectional ◽  
Production Factors ◽  
Labor Ratio ◽  
Capital Labor Ratio ◽  
Regional Product ◽  
Regions Of Russia

On the basis of models of production functions with an explanation level of 80-90%, built using cross-sectional data for the regions of the country, partial values of the coefficients of elasticity of labor productivity by production factors were obtained. Partial (regional) values of the coefficients of elasticity of labor productivity are calculated using the particular regression equations of models of production functions. The factors included the capital-labor ratio, wages, the price index of industrial goods, the coefficient of funds (an indicator of income inequality), the share of exports in the gross regional product. The regions are identified in which these factors have the maximum and minimum impact on labor productivity.

scholarly journals Modeling Sustainable Economic Development Using Production Functions

2021 ◽  
Vol 39 (5) ◽  
Author(s):  
Oleksandr Yankovyi ◽  
Viktor Koval ◽  
Larysa Lazorenko ◽  
Olga Poberezhets ◽  
Marina Novikova ◽  
...  
Keyword(s):  
Economic Development ◽  
Labour Productivity ◽  
Production Functions ◽  
Maximum Output ◽  
Marginal Rate ◽  
Sustainable Economic Development ◽  
Output Elasticity ◽  
Factor Substitution ◽  
Optimal Capital ◽  
Mathematical Characteristics

The most popular two-factor production functions used in the process of modeling sustainable economic development are examined. Economic and mathematical characteristics of Cobb-Douglas production functions, CES-function, linear function, Leontief and Allen functions are considered, in particular, type of dependence of labour productivity in relation to capital-labour ratio of commodity production system within mentioned production functions. Their most important economic and mathematical characteristics are presented: factors average and marginal return, demand for production resources, factor substitution, factors marginal rate of technical substitution, output elasticity by factors, elasticity of factors technical substitution, optimal capital-labour ratio according to the criterion of maximum output. Comparative analysis is given to Cobb-Douglas and CES-functions, which are two production functions mostly required in practice.

The Management of Basic Production Functions

2012 ◽  
pp. 110-175
Author(s):  
I. C. Dima ◽  
Vladimir Modrák
Keyword(s):  
Total Duration ◽  
Production Functions ◽  
Production Cycle ◽  
Calculation Technique ◽  
Manufacturing Line ◽  
Control Production ◽  
Basic Production ◽  
Electronic Calculation ◽  
Special Case ◽  
Industrial Company

The production achieved in any industrial company is generically called basic production that needs an appropriate management that is different for every type of mass, serial, or individual production. Every type of production is based on a set of mathematical restrictions that quantitatively and qualitatively quantify that type of production. The fundamentals of the management of any basic production refers to: the production cycle that has a certain structure, and the total duration, the size of which considers both the way that product is made and the graph of moving the benchmarks from one operation to another; the manufacturing batch and, respectively, the optimal manufacturing batch, meaning the time elapsed between the release into production of two consecutive batches. A special case is the production achieved on a single object and multiple object flow manufacturing lines variably and constantly, continuously and discontinuously, etc. Every flow manufacturing line has a certain cadence, a certain tact, generates certain costs, and has certain characteristics. In the case of control production, it can be organised by taking into account the product position or the nature of the manufacturing process. Every type of production generates costs that are different in terms of the structure and calculation, and the use of the electronic calculation technique is imperatively necessary.

OPTIMAL INVESTMENT, EDUCATION, AND CONSUMPTION UNDER DEMOGRAPHIC CHANGES FOR A SMALL-OPEN ECONOMY

2009 ◽  
Vol 54 (01) ◽  
pp. 41-59 ◽  
Author(s):  
HOAN XUAN PHAM
Keyword(s):  
Open Economy ◽  
Optimal Path ◽  
Small Open Economy ◽  
Physical Capital ◽  
Optimal Investment ◽  
Current Time ◽  
Labor Ratio ◽  
Capital Labor Ratio ◽  
Current Consumption ◽  
Vintage Model

It is shown, using a vintage model of education which is developed in this paper, that given the assumptions of the model, the optimal path of investment in education is to keep the level of investment per student constant and the optimal path of investment in physical capital is to keep the capital-labor ratio constant over time. The pressure to reduce current consumption caused by population ageing is partly mitigated by the fact that a younger population, in the current time, is relatively more efficient in producing utility than an older one, in the future.

Influence of New Technologies and Human Capital on theContribution of New Ways to Economy of Regions of Central Federal District

2017 ◽  
Vol 5 (4) ◽  
pp. 16-20 ◽  
Author(s):  
Леонид Басовский ◽  
Leonid Basovskiy ◽  
Елена Басовская ◽  
Elena Basovskaya
Keyword(s):  
Higher Education ◽  
Human Capital ◽  
New Technologies ◽  
Federal District ◽  
Gdp Per Capita ◽  
Labor Ratio ◽  
Capital Labor Ratio ◽  
Fixed Assets ◽  
Per Capita ◽  
A Share

The updated econometric estimates of the influence of new technologies and human capital on the contribution of new technological structures to the per capita GDP in the regions of the Central and North-Western federal districts of Russia are obtained. The article estimates coefficients of elasticity of the contribution of new ways to GDP per capita by the use of the new technologies estimated by capital-labor ratio of work by new fixed assets and by the use of the human capital estimated by a share of busy workers with the higher education. In case of big sizes of coefficients of elasticity of the contribution of new ways to GDP per capita on the use of the new technologies estimated by capital-labor ratio of labor by new fixed assets it is reasonable to increase the investments into fixed assets of the region. In case of big sizes of coefficients of elasticity of the contribution of new ways to GDP per capita on the use of the human capital estimated by a share of busy workers with the higher education it is reasonable to increase, first of all, a share of workers with the highest education.

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