gender differential paper IJCRB

ijcrb.webs.com
INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
3. Methodology
Endogenous growth assumes four basic inputs:
1. Capital
2. Labour
3. Human Capital
4. Index of Technology Level
Where
.
.
.
.
.
Y = f (A , K , L , H ) (1)
.
Y = growth rate of GDP or Value-added
.
K = growth rate of Physical Capital
.
L = growth rate of Labour
.
JUNE 2011
VOL 3, NO 2
H = growth rate of Human Capital (activities as education & training, R&D, on the
job training etc.)
.
A = growth rate of Technology Level
Openness of the economy and interaction into world economy had also been one of the major
determinants of growth for several economies. If we include openness of the economy or
international trade as a determinant of growth Eq (1) can be written as:
.
.
Y = f (A , K , L , H
.
.
.
.
,T
.
) (2)
Where; T = Degree of Openness of the Economy
In order to measure the major factors contributing to growth, technological change and
technical efficiency, Cobb-Douglas production function is applied. Equation (2) in the form
of Cobb-Douglas production function can be written as:
Y t = AH γ t K α t L β t T ψ t (3)
Technological change is assumed with the following specification;
e λ 1 t + λ 2 t2 = Variable and continuous growth of technological change.
Cobb-Douglas production function with variable technical change is written as:
Y t = Ae λ 1 t + λ 2 t2 H γ t K α t L β t T ψ t (4)
Where
Y t = Value of output or value-added
K t = Capital Stock
COPY RIGHT © 2011 Institute of Interdisciplinary Business Research 1853