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Returns to Scale in Canadian Manufacturing: An Interprovincial Comparison

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  • Michael Benarroch

Abstract

This paper measures the degree of returns to scale at the two-digit Standard Industrial Classification (SIC) in Canadian manufacturing employing both gross output and value added data. Using a model developed by R. J. Caballero and R. K. Lyons, the study distinguishes between internal and external returns to scale. The Caballero and Lyons model is extended by disaggregation to the provincial level in order to measure the returns to scale of geographic (provincial) concentration. The empirical results suggest that in Canada there are increasing returns that are primarily national rather than internal to the province or the industry.

Suggested Citation

  • Michael Benarroch, 1997. "Returns to Scale in Canadian Manufacturing: An Interprovincial Comparison," Canadian Journal of Economics, Canadian Economics Association, vol. 30(4), pages 1083-1103, November.
  • Handle: RePEc:cje:issued:v:30:y:1997:i:4:p:1083-1103
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    Cited by:

    1. Bilancini, Ennio & D'Alessandro, Simone, 2012. "Long-run welfare under externalities in consumption, leisure, and production: A case for happy degrowth vs. unhappy growth," Ecological Economics, Elsevier, vol. 84(C), pages 194-205.
    2. Andreas Pfingsten & Reiner Wolff, 2009. "Factor Supply Changes in Small Open Economies: Rybczynski Derivatives under Increasing Marginal Costs," Finnish Economic Papers, Finnish Economic Association, vol. 22(1), pages 9-20, Spring.
    3. Ronald Jones; Henryk Kierzkowski, 2004. "International Trade and Agglomeration: An Alternative Framework," IHEID Working Papers 10-2004, Economics Section, The Graduate Institute of International Studies.
    4. Ronald Jones & Henryk Kierzkowski, 2005. "International trade and agglomeration: An alternative framework," Journal of Economics, Springer, vol. 10(1), pages 1-16, December.
    5. Henriksen, Espen & Steen, Frode & Ulltveit-Moe, Karen-Helene, 2001. "Economies of Scale in European Manufacturing Revisited," CEPR Discussion Papers 2896, C.E.P.R. Discussion Papers.
    6. Liu, Wen-Fang & Turnovsky, Stephen J., 2005. "Consumption externalities, production externalities, and long-run macroeconomic efficiency," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 1097-1129, June.
    7. Turnovsky, Stephen J. & Monteiro, Goncalo, 2007. "Consumption externalities, production externalities, and efficient capital accumulation under time non-separable preferences," European Economic Review, Elsevier, pages 479-504.
    8. Diane Dupont & Steven Renzetti, 2001. "The Role of Water in Manufacturing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 18(4), pages 411-432, April.
    9. Jafar Ebadi & Saeed Mousavi Madani, 2006. "The Economies of Scale in Iran Manufacturing Establishments," Iranian Economic Review, Economics faculty of Tehran university, vol. 11(1), pages 143-170, winter.

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