of capital stock from the vintage capital model. Tables A.13-A.17 (technical appendix, section A.2), demonstrate the variation of estimated elasticities across countries. Estimated cross-price elasticities of other input demands are presented in Tables A.18 and A.19, (technical appendix, section A.2). Figures A.1-A.5 (technical appendix, section A.3) show the values of the calculated indices of input efficiency of capital stock.

The regression results show that the vintage capital model generally provides a better explanation of energy demand. The R-squared values are higher for the vintage capital model (Tables A.8-A.12, technical appendix, section A.2). The likelihood ratio test indicates that the dynamic factor demand model restriction of input efficiencies of capital stock being equal to 1 is rejected at the 1 percent level of significance for all five industry estimates.

Table 1: Own-Price Elasticities of Input Demand in OECD Manufacturing Sectors

|Sector|_ηl_|_l_|_ηe_|_e_||_ηmm_|
|---|---|---|---|---|---|---|
||VCM|P-R|VCM|P-R|VCM|P-R|
|Chemical, Rubber, Plastics and Fuel Products|-0.91<sup>_∗∗∗_</sup>|-0.90<sup>_∗∗∗_</sup>|-0.21|-0.48<sup>_∗_</sup>|-0.43<sup>_∗∗∗_</sup>|-0.45<sup>_∗∗∗_</sup>|
||(0.10)|(0.09)|(0.57)|(0.25)|(0.09)|(0.09)|
|Electrical and Optical Equipment|-0.88<sup>_∗∗∗_</sup>|-0.87<sup>_∗∗∗_</sup>|-0.66<sup>_∗∗∗_</sup>|-0.38|-0.36<sup>_∗∗∗_</sup>|-0.34<sup>_∗∗∗_</sup>|
||(0.16)|(0.15)|(0.17)|(0.32)|(0.09)|(0.09)|
|Food Products, Beverages, and Tobacco|-1.16<sup>_∗∗∗_</sup>|-1.00<sup>_∗∗∗_</sup>|-0.34<sup>_∗∗_</sup>|-0.41<sup>_∗∗∗_</sup>|-0.22<sup>_∗∗∗_</sup>|-0.22<sup>_∗∗∗_</sup>|
||(0.14)|(0.10)|(0.17)|(0.15)|(0.05)|(0.05)|
|Basic Metals and Fabricated Metal Products|-1.17<sup>_∗∗∗_</sup>|-1.10<sup>_∗∗∗_</sup>|-0.86<sup>_∗∗∗_</sup>|-1.05<sup>_∗∗∗_</sup>|-0.43<sup>_∗∗∗_</sup>|-0.44<sup>_∗∗∗_</sup>|
||(0.21)|(0.19)|(0.01)|(0.05)|(0.07)|(0.07)|
|Pulp, Paper, Paper Products, Printing and Publishing|-0.83<sup>_∗∗∗_</sup>|-0.79<sup>_∗∗∗_</sup>|-0.55<sup>_∗∗∗_</sup>|-0.54<sup>_∗∗∗_</sup>|-0.46<sup>_∗∗∗_</sup>|-0.45<sup>_∗∗∗_</sup>|
||(0.11)|(0.10)|(0.18)|(0.19)|(0.07)|(0.07)|

Notes. _ηll_ , _ηee_ , and _ηmm_ denote respectively own price elasticities of labor, energy, and materials demand. VCM: Vintage Capital Model, P-R: Pindyck and Rotemberg (1983) Model. All Elasticities are Calculated at Sample Means. Standard errors in parentheses.<sup>_∗∗∗_</sup> p _<_ 0.01,<sup>_∗∗_</sup> p _<_ 0.05,<sup>_∗_</sup> p _<_ 0.1.

Overall, the estimates of own-price and cross-price elasticities of input demand are consistent with their economic interpretation. Table 1 demonstrates that all of the estimated own-price elasticities of input demands across different countries and sectors have the expected signs and reasonable magnitudes. The estimated elasticities did not have the expected sign in some countries, where input cost shares were close to zero (see Tables A.13-A.17, technical appendix, section A.2). This is a well-known problem documented in previous studies using a translog model (Urga and Walters 2003). However, in almost all cases, the elasticities were not statistically different from zero. Based on the vintage capital model estimates, own-price elasticity of labor demand varies between -0.83 and -1.17, own-price elasticity of energy demand varies between -0.21 and 19