March 2000 © 2000 Organization of the Petroleum Exporting Countries 1 Energy and interfactor substitution in Turkey Carol Dahl and Meftun Erdogan Abstract Not only access to the factors of production — capital, labour and energy — but also substitutability among these factors has a strong influence on how economies change and evolve. When factors are easily substituted for one another, shortages and dis- ruptions are less detrimental to the growth process. Numerous studies have considered interfactor substitution for industrial countries. But, since only a few have been done for developing countries, we summarize such work for these countries, apply the ever-popular translog model to Turkish aggregate industrial, manufacturing and mining data and compare our work with simi- lar studies on both developing and industrial countries. We find own-input demand elasticities to be negative and inelastic for all factors and all sectors and all own-price elasticities are less than 0.6 in absolute value. Cross elasticities are all in the inelas- tic range and suggest that capital and labour, as well as capital and energy, are substitutes, whereas energy and labour are complements.