Returns to Scale in Small and Large U.S. Manufacturing Establishments: Further Evidence
AbstractNguyen and Reznek (1991) used plant-level data for five 4-digit SIC industries to estimate and compare the degrees of returns-to-scale for establishments of various size classes for the years 1977 and 1982. They found that the estimated scale elasticities of all plant sizes have values approximately equal to one. They, therefore, concluded that both small and large establishments under study are equally efficient in production. The purpose of the present study is to extend and improve upon Nguyen and Reznek's work by (1) extending the data set to cover the entire U.S. manufacturing sector, (2) improving the model by including energy as a separate input in production, and (3) relaxing the assumption of homogeneity and estimating an unrestricted (non-homogeneous, non-homothetic) production model. With the improved model and data, it is found that the estimated scale elasticities for all sizes of establishment are statistically insignificantly different from one. Thus, the result confirms and strengthens Nguyen and Reznek's finding that a large establishment size is not a necessary condition for efficient production. Copyright 2002 by Kluwer Academic Publishers
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal Small Business Economics.
Volume (Year): 19 (2002)
Issue (Month): 1 (August)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100338
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Jan Eeckhout & Boyan Jovanovic, 2007.
"Occupational Choice and Development,"
NBER Working Papers
13686, National Bureau of Economic Research, Inc.
- Matthias Kehrig, 2011.
"The Cyclicality of Productivity Dispersion,"
2011 Meeting Papers
484, Society for Economic Dynamics.
- Sadorsky, Perry, 2008. "Assessing the impact of oil prices on firms of different sizes: Its tough being in the middle," Energy Policy, Elsevier, vol. 36(10), pages 3854-3861, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.