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Returns to Scale for EU Regional Manufacturing

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Author Info
Alvaro Angeriz
John McCombie
Mark Roberts

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Abstract

Recent theoretical advances have emphasised the importance of localised increasing returns to scale in understanding both the regional growth and agglomeration processes. However, considerable empirical controversy still exists over whether returns to scale are constant or increasing. Consequently, this study aims to provide some new estimates of the degree of returns to scale for EU regional manufacturing. It does so within the framework of the Verdoorn law. Unlike previous studies, issues of specification of fundamental importance to recent theoretical developments are brought to attention. Overall, the paper concludes that localised increasing returns in EU regional manufacturing are substantial.

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File URL: http://webspace.qmul.ac.uk/pmartins/CGRWP20.pdf
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Publisher Info
Paper provided by Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research in its series Working Papers with number 20.

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Date of creation: Aug 2008
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Handle: RePEc:cgs:wpaper:20

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Web page: http://www.busman.qmul.ac.uk/cgr/cgrindex.html
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Related research
Keywords: increasing returns; Verdoorn law; manufacturing; productivity growth; spatial econometrics;

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Find related papers by JEL classification:
O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes

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References listed on IDEAS
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  6. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1991-1), pages 107-182. [Downloadable!]
    Other versions:
  7. Swan, Trevor W, 2002. "Economic Growth," The Economic Record, The Economic Society of Australia, vol. 78(243), pages 375-80, December. [Downloadable!] (restricted)
  8. McCombie, J S L & de Ridder, J R, 1984. ""The Verdoorn Law Controversy": Some New Empirical Evidence Using U.S. State Data," Oxford Economic Papers, Oxford University Press, vol. 36(2), pages 268-84, June. [Downloadable!] (restricted)
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  12. Maria Abreu & Henri L.F. de Groot & Raymond J.G.M. Florax, 2004. "Space and Growth," Tinbergen Institute Discussion Papers 04-129/3, Tinbergen Institute. [Downloadable!]
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  15. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June. [Downloadable!] (restricted)
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  16. Caballero, Ricardo J. & Lyons, Richard K., 1992. "External effects in U.S. procyclical productivity," Journal of Monetary Economics, Elsevier, vol. 29(2), pages 209-225, April. [Downloadable!] (restricted)
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