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An Analysis of Production Relations in the Large-scale Textile Manufacturing Sector of Pakistan
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Abstract
This paper attempts to determine econometrically the underlying production relations for the large-scale textile manufacturing sector of Pakistan, based on data available from the six most recent censuses of large-scale manufacturing industries. The coyariance model is used for pooling the provincial data. Testing for alternative forms reveals that the CES production function with constant-returns-to-scale most adequately explains the underlying production structure. The estimates of the elasticity of substitution are significantly different from zero in all cases, implying significant and efficient employment generation possibilities.