Modelling the Demand for Factors of Production in the Mechnical Engineering Industry of Northern Ireland, 1954-79

here have been few attempts to model the demand for factors of pro-JL duction at a sub-national level, even though the main emphasis of regional policy in most countries has been an attempt to increase the demand for labour and capital through the availability of factor subsidies. Estimates of the parameters of production functions are more readily available with regard to the US and Japanese regional economiesalthough many of these have used cross-sectional data (two particular exceptions are Alperovich, 1980; and Carlino, 1982), while Harris (1982a) has provided a comprehensive set of parameter results using time-series data for the regions of the UK (previous UK studies have been hampered through not having access to regional capital stock data, e.g., O'Donnell and Swales, 1979). Factor demand models have been estimated using Irish data (Higgins, 1981;Boyle and Sloane, 1982), while a recent paper by Hanseman (1986) estimated a quarterly factor demand model for Cincinnati (USA) using a Nadiri and Rosen (1969) type approach. This paper estimates an econometric model of the demand for the factors of production using data