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External Economies In Taiwan'S Manufacturing Industries

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  • Vei-Lin Chan
  • Been-Lon Chen
  • Kee-Nam Cheung

Abstract

This paper presents estimates of indexes of internal returns to scale and external economies for two-digit manufacturing industries in Taiwan. Estimating the returns to scale indexes involves using both SUR and 3SLS estimation procedures. The data strongly support the presence of external increasing returns to scale. The findings indicate no evidence of internal increasing return in all two-digit manufacturing industries. According to the endogenous growth literature, the existence of externalities in production bears important economic implications in some aspects of economic growth, even though the data cannot distinguish the transmission mechanism. Copyright 1995 Western Economic Association International.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Contemporary Economic Policy.

Volume (Year): 13 (1995)
Issue (Month): 4 (October)
Pages: 118-130

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Handle: RePEc:bla:coecpo:v:13:y:1995:i:4:p:118-130

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Cited by:
  1. Gene M. Grossman & Esteban Rossi-Hansberg, 2008. "External Economies and International Trade Redux," NBER Working Papers 14425, National Bureau of Economic Research, Inc.
  2. de la Torre, Augusto & Didier, Tatiana & Pinat, Magali, 2014. "Can Latin America tap the globalization upside ?," Policy Research Working Paper Series 6837, The World Bank.

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