APPLICATION COBB-DOUGLAS PRODUCTION FUNCTION FOR ANALYSIS OF PRODUCTION IN POLISH STEEL INDUSTRY

1 GAJDZIK Bożena
Institution:
1 Silesian University of Technology, Faculty of Materials Engineering and Metallurgy, Katowice, Poland, EU bozena.gajdzik@polsl.pl
Conference:
26th International Conference on Metallurgy and Materials, Hotel Voronez I, Brno, Czech Republic, EU, May 24th - 26th 2017
Proceedings:
Proceedings 26th International Conference on Metallurgy and Materials
Pages:
2132-2138
ISBN:
978-80-87294-79-6
ISSN:
2694-9296
Published:
9th January 2018
Proceedings of the conference were published in Web of Science and Scopus.
Metrics:
38 views / 11 downloads
Abstract

The article presents the use of Cobb-Douglas production function (C-D model) to analyse the impact of two basic factors of production: capital and labour of its size in Polish steel industry. Paul Cobb and Charles Douglas wrote the function as: P = a Lα C1-α (where P is the production of L - labour, C - capital). In this century the function was popularized in the neoclassical model of the company. Currently, the C-D function is used to assess the scale of production in economy, industry and company. In the paper the function (changed by David Durand): P = a Lα Cβ was used. The problem of the research is the selection of variables to the model C-D for the steel industry in Poland (on the basis of data for the period 2000-2015). The author of the article decided to verify the classical approach to define changed parameters of the C-D function according to the situation in Polish steel industry. The use of C-D function to assess economic activity of steel industry in Poland, evaluated the effectiveness of the restructuring measures (after the transformation of the economic system in Poland) and answer the question about level of the market maturity by restructured steel industry in Poland.

Keywords: Crude steel production, Polish steel industry, Cobb-Douglas production function
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