Factors Affecting the Production of Machinery and Equipment Industries

The manufacture of machinery and equipment has one of the largest production value chains among different industries and the products of these industries are widely used as intermediate goods in other industries. In this paper, the production function, Average elasticity, marginal elasticity, substitution elasticity, and elasticities of types of energy for the nine selected activities of the machinery and equipment industries have been estimated by using the Translog production function and seasonal statistics and information of the years 2002(2)-2019 (1).The results show that the marginal elasticities of labor, capital stock, and energy are positive for all the production activities. The average elasticities of employment and energy in three activities the manufacture of pumps, compressors, taps, and valves (2813), manufacture of bearings, gears, gearing, and driving elements (2814), manufacture of machinery for textile, apparel, and leather production (2826) are more than the other activities. The manufacture of engines and turbines except aircraft, vehicle, and cycle engines (2811), manufacture of machinery for metallurgy (2823), and manufacture of the other special-purpose machinery (2829), have the most average production elasticity with respect to the capital stock and energy, respectively. In the manufacture of bearings, gears, gearing, and driving elements (2814), manufacture of agricultural and forestry machinery (2821), manufacture of machinery for mining, quarrying, and construction (2824), and manufacture of machinery for textile, apparel, and leather production (2826), the estimated coefficients for the substitution elasticities between capital stock and employment as well as the substitution elasticities between capital stock and energy are positive that it indicates the inputs are substitute, In the manufacture of pumps, compressors, taps, and valves (2813) and the manufacture of the other special-purpose machinery (2829), there is a substitution relationship between only the two inputs of capital stock and employment. Substitution relations between energy and employment for the three activities of manufacture of bearings, gears, gearing, and driving elements (2814), manufacture of engines and turbines, except aircraft, vehicle, and cycle engines (2811), and manufacture of machinery for metallurgy (2823) has been observed.