Technological change in the Spanish automobile industry (1983-1992). A case study

Abstract

This paper contributes to the study of the Spanish automobile industry with the estimation of a production function that summarizes the production technology for an auto assembly plant belonging to a multinational company, in the early years of operation. The results include estimations of the parameters of the production, including the mean rate of technical progress in the period of study. Even though the history of the automobile industry in Spain includes many papers that make reference to productivity as an indicator of productive efficiency, they mostly refer to labour productivity that matches operating efficiency only in very special cases. The results suggest that other reasons besides lower labour costs may explain the comparative advantage of the auto industry in Spain.