| This study deals with the general functional characterization of the Pakistani Textile Industry. Previous studies assumed constant elasticity of substitution functional form, the best-fitted model for general manufacturing industries of Pakistan. There is only one study in which the textile industry is treated separately, but the functional form used is the same, and investigations are done at the provincial level with data pooling for other provinces.; The important point in this study is that functional form is not restricted and allowed to be estimated freely by the collected data. We assume that the productivity growth of Pakistani Textiles can be properly specified by a non-homothetic and nonneutral growth flexible functional form. This function is continuous, monotic, concave and twice derivable.; The concept of duality of cost function is utilized to evaluate the production function characterized by the above-mentioned properties. To discriminate among the flexible functional forms, the Cox-Box transformation is used, both in production as well as in cost functions. Non-neutral scale effect, biases of technical change, input price changes and output quantity changes are used to analyze the productivity growth.; Total factor productivity is used as the growth index. It is calculated by residual as well as by parametric methods. The model used is the four input model with stochastic disturbance term. The method of estimation is maximum likelihood estimation. The error terms are used to account for discrepancy in cost minimizing behavior of the function.; The four input model has been used to estimate the Pakistani textile industry, 1965-1989. The inputs are capital, labor, energy and intermediate material.; The main hypotheses tested are neutrality of technical change and homothetic shifts of the function.; The elasticity results show that energy and capital exhibit complementarity behavior, while both of them are labor substitutable. The scale effects are labor and energy saving and technical change effects are energy and capital-using and labor-saving. Also capital and energy are more own price elastic than labor.; The contribution of scale economies to the productivity is almost the same in all the selected models, while the contribution of technical change effects is varying and not significant. |
