Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/195384 
Year of Publication: 
2017
Citation: 
[Journal:] Revista de Métodos Cuantitativos para la Economía y la Empresa [ISSN:] 1886-516X [Volume:] 24 [Publisher:] Universidad Pablo de Olavide [Place:] Sevilla [Year:] 2017 [Pages:] 129-146
Publisher: 
Universidad Pablo de Olavide, Sevilla
Abstract (Translated): 
A large body of economic literature has established that the primary purpose of business is profit maximization assuming unitary and constant elasticity of substitution of production factors. However, the prevailing operating conditions of micro and small enterprises raise concerns about the validity of this assumption and the objectives in this sector. Through an empirical study for Mexico and using the translog production function based on cross-sectional data by 2014, we find that the substitution elasticities between production factors are not unitary and even to some extent, they show complementarity. This forces us to consider that beyond seeking to maximize profits, micro and small enterprises might be including other objectives, such as to optimizing installed capacity.
Subjects: 
elasticity
production factors
production functions
cost functions
maximization
JEL: 
C31
C51
D20
D21
Creative Commons License: 
cc-by-sa Logo
Document Type: 
Article

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