In a research on the technical efficiency of SMEs in Tanzania, I estimate the elasticity of capital and labor inputs using the trans-log production function through the following equations:
Capital elasticity= βk + (βkk * lnk) + (βkl * lnl)
Labor elasticity= βl + (βll * lnl) + (βkl * lnk)
the equations work efficiently, but sometimes this problem has emerged, as capital elasticity has taken the negative signal. Is that possible, and what are the reasons?
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