R&D, Production Structure and Rates of Return in the U.S., Japanese and German Manufacturing Sectors: A Nonseparable Dynamic Factor Demand Model
Pierre A. Mohnen, M. Ishaq Nadiri, and Ingmar Prucha ,
( 30 )
European Economic Review

The focus of this paper is an analysis of the production structure, the demand for factor inputs, and the rates of return in the manufacturing sector of three major industrialized countries, the United States, Japan and Germany. The analysis is based on a dynamic factor demand model with two variable inputs, labor and materials, and two quasi-fixed inputs, capital and R&D. Adjustment costs are explicitly specified. The demand equations are derived from an intertemporal cost-minimization problem formulated in discrete time.

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