Comparison of Production Functions and Economic Efficiency between Rural and Urban Manufacturing Industries

다국어 초록 (Multilingual Abstract)

This study intends to examine comparison of resource productivity and economic efficiency between rural and urban manufacturing industries by estimating Cobb-Douglas production functions in rural and urban manufacturing industries, respectively. The estimated economic efficiencies between rural and urban manufacturing industries from the results of the estimated output elasticities of labor and capital input in rural and urban manufacturing industries show significantly considerable differences in their magnitude. In particular, economic inefficiency of labor is significantly higher in urban manufacturing industries than in rural manufacturing industries. From the comparisons of economic efficiency of labor and capital between rural and urban manufacturing industries, this study indicates that much of rural manufacturing industries will promote more rural employment creation from the standpoint of maximum efficiency of labor input in the production process. Furthermore, this study suggests that much of rural manufacturing industries will reduce supply of capital input in the production process in order to achieve maximum efficiency in capital input as well as profit maximization.