Macroeconomic Implications of Factor Substitution in Industrial Processes

摘要

This paper examines the scope for capital-labor substitution in the LDCs, that is, it is concerned with efficient alternatives to best-practice techniques used in the developed countries. It addresses three principal questions: How do the benefits to private producers of systematically adopting appropriate technology compare with those of adopting capital-intensive technology; How surmountable are the obstacles to adopting appropriate technology that is available; and If the benefits of adopting appropriate technology are great and the obstacles surmountable, why are LDC producers opting for capital-intensive processes. The analysis relies on engineering-economic analyses to answer the first question; a reformulation of obstacles in a cost-benefit framework to answer the second; and a discussion of alternative profit-seeking activities of producers to answer the third. (Copyright (c) 1980 by The World Bank.)