Cost Structure Analysis of Fars Cement Factory Using Composite Cost Function

Anvari, Ebrahim; ZarraNezhad, Mansour; Eskandary, Hanieh

doi:10.30473/indeco.2019.17004.1013

Document Type : applicative

Authors

¹ Assistant Professor, Department of Economics, Shahid Chamran University

² Professor, Department of Economics, Shahid Chamran University

³ Ph.D. Candidate, Department of Economics, Shahid Chamran University

https://doi.org/10.30473/indeco.2019.17004.1013

Abstract

It is important to analyze the relationship between inputs in the cement production due to high share of added value and great contribution of cement industry in national product and construction projects. In this paper, returns to scale, elasticities of substitution, function coefficients and economies of scale in Fars Cement Company were estimated and analyzed using the composite cost function and dual cost approach. Using the data for the period 2002 to 2012 and apliying the iterated nonlinear seemingly unrelated regression (NLSUR), the cost function was estimated. According to the results ofAllen cross partial elasticity for each pair of inputs, labor is a substitution for capital and other services, andcapital and other services are complementary. In addition, the demandfunctions for all factors of production with respect to their prices are inelastic. The other results indicate that the production of cement in Fars Cement Company enjoyed economies of scale and increasing return to scale.

Keywords

References

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Journal of Industrial Economics researches

Cost Structure Analysis of Fars Cement Factory Using Composite Cost Function

References

References

Volume 1, Issue 2 - Serial Number 2
January 2017
Pages 39-52

Cost Structure Analysis of Fars Cement Factory Using Composite Cost Function

References

References

Volume 1, Issue 2 - Serial Number 2January 2017Pages 39-52

Volume 1, Issue 2 - Serial Number 2
January 2017
Pages 39-52