Efficient Utilization of Resources in Manufacturing Firms

Abstract

This study describes the optimality in resource utilization of the manufacturing firms in the south-west region of Bangladesh. A translog production function has been estimated to describe the input-output relationship. The large scale firms have the opportunity to substitute capital for labour for producing the same level of output. On the other hand, scarcity in capital leads to lower productivity of labour in medium and small firms. Therefore, an increase in capital may lead to an increase in labour productivity as well as output for these small and medium firms. The productive labour force may ensure proper utilization of the capital resources as well as the long run growth.