IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v33y2001i12p1503-1513.html
   My bibliography  Save this article

The Spanish automotive industry: scale economies and input relationships

Author

Listed:
  • Lila Truett
  • Dale Truett

Abstract

This paper investigates the existence of economies of scale in the Spanish automobile industry as well as the substitution possibilities between input pairs and the direct and cross price elasticities of demand for the various inputs by estimating a translog cost function for both a three input model involving capital, labour, and intermediate goods as well as a four input model where energy is separated from other intermediate goods. The results of this study are consistent with the hypothesis of economies of scale in the Spanish automobile industry, particularly at the low and mean levels of output. These results also are consistent with the hypothesis that capital is a substitute for the other inputs, but that labour and intermediate goods are complements. Labour and energy also appear to have a complementary relationship over most of the data points in this study. The significance of a complementary relationship between labour and intermediate goods is that any attempt by the Spanish government to restrict imports of these inputs, resulting in higher domestic prices for them, may aggravate an already serious domestic unemployment problem.

Suggested Citation

  • Lila Truett & Dale Truett, 2001. "The Spanish automotive industry: scale economies and input relationships," Applied Economics, Taylor & Francis Journals, vol. 33(12), pages 1503-1513.
  • Handle: RePEc:taf:applec:v:33:y:2001:i:12:p:1503-1513
    DOI: 10.1080/00036840012960
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00036840012960
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rudholm, Niklas, 2008. "Entry of new pharmacies in the deregulated Norwegian pharmaceuticals market--Consequences for costs and availability," Health Policy, Elsevier, vol. 87(2), pages 258-263, August.
    2. Nursel AYDINER-AVSAR & Özlem ONARAN, 2010. "The Determinants Of Employment: A Sectoral Analysis For Turkey," The Developing Economies, Institute of Developing Economies, vol. 48(2), pages 203-231.
    3. Rudholm, Niklas, 2006. "Mergers and Economies of Scale: Volkswagen AG 1976 - 2000," HUI Working Papers 4, HUI Research.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:33:y:2001:i:12:p:1503-1513. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.