Abstract:
The paper aimed to analyze the relationship between output and its determinants: capital and labor in Romania's agriculture. The empirical data regarding GDP, fixed assets (FA) and employment (EM) in the period 2002-2012 were provided by the National Institute of Statistics. The applied methodology included the substitution elasticity, the Cobb Douglas production function, ANOVA, F test and the determination coefficient. The fixed assets registered a continuous growth with a positive impact on the agricultural output, while employment recorded a descending trend. The substitution elasticity reflected that the change of fixed assets and employment in agriculture is possible in some proportions. The matrix calculations for fixed assets, employment and GDP in logarithms led to the solutions for the parameters a, α and β. As the value of the sum α + β was lower than 1, the GDP growth in agriculture will be lower than the proportional change of fixed assets and employment. The established Cobb Douglas production function: GDP (FA, EM) = 125828.3829 FA0.184166812 EM- 0.413115989 showed the positive influence of fixed assets and the low impact of employment on the agricultural output. About 64.37 % GDP was explained by the regression model as confirmed by the determination coefficient, R2= 0.6437569. Fisher's Test led to the conclusion that between fixed assets and employment it is a real dependence and the linear regression model has been correctly estimated. In order to increase GDP created in agriculture, it is needed to improve the technical endowment by investments, and raise the employees' training level for assuring a higher labor productivity.
