Capital-labor substitution in a developing country: the case of Greece: A note

Estimates of the elasticity of substitution between capital and labor in the manufacturing sector of the Greek economy are obtained by using a cost-function approach and are compared with the results of previous research. Such previous results show the elasticity of substitution to be significantly higher than one, while our results, using the same time-series data for 17 two-digit manufacturing sectors for the period 1958–1973, give much lower estimates.