Setting of a production function to the financial sector in Colombia
Abstract
This work develops in detail the methodology of panel data to find the best econometric specifica- tions of a production function, comparing the Cobb-Douglas and the translog with data from the Co- lombian finance sector. It’s found that the function that adjusts better is the translog with fixed effects, which indicates, on one hand, that there are a significant difference in relation to capital return and the work on the income between banks; and for another hand, that there are secondary effects in the sector and elasticities vary. Also, it’s found that the capital and work have decreasing marginal productivities and that these two factors are complementary. From another side, it’s demonstrated that elasticity of capital is unitary and significant; meanwhile the work factor only complements to capital, being more a tool than a significant contribution for the banks income.
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References
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