| Empirical estimation is carried out for airframe manufacturing and aircraft engine industries to obtain knowledge of production structures in dual-use industries and the rate of technological change. Two technological indices are used in the econometric modelling: one is cumulative manhours to posit the learning effects in airframe manufacturing, the other is historical engine performance characteristics. In the latter model, we measure the effect of improved engine efficiency on airframe manufacturing productivity growth, thereby provide a technological linkage between the upstream and downstream industries. The econometric model is then used to carry out simulation exercises to draw inferences regarding capacity utilization and assess the adequacy of capital investment in these industries. |
