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A nonparametric test of quasiconcave production function with variable returns to scale. (English) Zbl 1417.91306
Summary: Modeling “quasiconcavity” and “variable returns to scale” simultaneously is a challenging task. This paper defines variable returns to scale vigorously and explores its relationships with elasticity of scale and S-shaped functions. To check empirical data for consistency with both properties, this paper extends the current nonparametric tests for quasiconcave function to include both increasing and decreasing returns to scale. To accomplish this task, an empirical quasiconcave production function that exhibits variable returns to scale is introduced.
91B38 Production theory, theory of the firm
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