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External scale economies in manufacturing sector of Pakistan: a comparison of large scale manufacturing sector of Sindh and Punjab

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Author Info
Zafar, Sohail
Ahmed, Vaqar

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Abstract

This study investigates the external economies of scale in the manufacturing sector of Pakistan. The Return to scale is a property of the production function that indicates the relationship between proportionate change, in all inputs and resulting change in output. Returns to scale are applicable only in the long run, since all inputs are being changed. The estimated value of the coefficient of returns to scale at aggregate level is 1.017. It means that one percentage point change in all input quantities results in 1.017 percent change in output. It turns out that manufacturing sector of Pakistan is characterized by almost constant returns to scale at aggregates and disaggregate level.

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File URL: http://mpra.ub.uni-muenchen.de/17665/
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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 17665.

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Date of creation: 04 Oct 2009
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Handle: RePEc:pra:mprapa:17665

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Related research
Keywords: Economies of Scale; Distortion; Efficiency; Pakistan;

Find related papers by JEL classification:
E23 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Production
R32 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - Other Production and Pricing Analysis
D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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This page was last updated on 2009-12-6.

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