IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Economies of scale: A survey of the empirical literature

  • Junius, Karsten
Registered author(s):

    If firms were animals rather than economic entities, a behavioral scientist trying to describe their traits would observe that firms tend to be found in herds and usually migrate towards the biggest watering holes. This paper surveys the literature on the questions why firms grow stronger with size, why they are found in herds, and what the effects are of meeting other herds around the watering holes. In economist-speak, I review the empirical literature on internal and external economies of scale. Internal scale economies arise on the level of a single firm. External scale economies arise on the level of an industry or a region. For each type of scale economies, I consider static and dynamic effects.

    If 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.

    File URL: http://econstor.eu/bitstream/10419/46809/1/257982418.pdf
    Download Restriction: no

    Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 813.

    as
    in new window

    Length:
    Date of creation: 1997
    Date of revision:
    Handle: RePEc:kie:kieliw:813
    Contact details of provider: Postal:
    Kiellinie 66, D-24105 Kiel

    Phone: +49 431 8814-1
    Fax: +49 431 85853
    Web page: http://www.ifw-kiel.de
    Email:


    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Torstensson, Johan, 1996. "Determinants of Intra-industry Trade: A Sensitivity Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(3), pages 507-24, August.
    2. Donald R. Davis & David E. Weinstein, 1996. "Does Economic Geography Matter for International Specialization?," NBER Working Papers 5706, National Bureau of Economic Research, Inc.
    3. Jeffrey I. Bernstein & M. Ishaq Nadiri, 1988. "Interindustry R&D Spillovers, Rates Of Return, and Production In High-Tech Industries," NBER Working Papers 2554, National Bureau of Economic Research, Inc.
    4. Wibe, Soren A, 1984. "Engineering Production Functions: A Survey," Economica, London School of Economics and Political Science, vol. 51(204), pages 401-11, November.
    5. Hammond, George & von Hagen, Jürgen, 1994. "Industrial Localization. An Empirical Test for Marshallian Localization Economies," CEPR Discussion Papers 917, C.E.P.R. Discussion Papers.
    6. Audretsch, David B & Stephan, Paula E, 1996. "Company-Scientist Locational Links: The Case of Biotechnology," American Economic Review, American Economic Association, vol. 86(3), pages 641-52, June.
    7. Banerji, Ranadev, 1978. "Average size of plants in manufacturing and capital intensity : A cross-country analysis by industry," Journal of Development Economics, Elsevier, vol. 5(2), pages 155-166, June.
    8. Wibe, Soren, 1986. "Observable and Non-observable Data: A Reply [Engineering Production Functions--A Survey]," Economica, London School of Economics and Political Science, vol. 53(212), pages 535-36, November.
    9. Nakamura, Ryohei, 1985. "Agglomeration economies in urban manufacturing industries: A case of Japanese cities," Journal of Urban Economics, Elsevier, vol. 17(1), pages 108-124, January.
    10. James A. Brander & Barbara J. Spencer, 1984. "Export Subsidies and International Market Share Rivalry," NBER Working Papers 1464, National Bureau of Economic Research, Inc.
    11. Thomas G. Cowing & V. Kerry Smith, 1978. "The Estimation of a Production Technology: A Survey of Econometric Analyses of Steam-Electric Generation," Land Economics, University of Wisconsin Press, vol. 54(2), pages 156-186.
    12. repec:hoo:wpaper:e-95-4 is not listed on IDEAS
    13. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
    14. Tybout, James R. & Westbrook, M. Daniel, 1995. "Trade liberalization and the dimensions of efficiency change in Mexican manufacturing industries," Journal of International Economics, Elsevier, vol. 39(1-2), pages 53-78, August.
    15. Kiminori Matsuyama, 1995. "Complementarities and Cumulative Processes in Models of Monopolistic Competition," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 701-729, June.
    16. Jeffrey I. Bernstein & M. Ishaq Nadiri, 1989. "Research and Development and Intra-industry Spillovers: An Empirical Application of Dynamic Duality," Review of Economic Studies, Oxford University Press, vol. 56(2), pages 249-267.
    17. Atack, Jeremy, 1978. "Estimation of Economies of Scale in Nineteenth-Century United States Manufacturing and the Form of the Production Function," The Journal of Economic History, Cambridge University Press, vol. 38(01), pages 268-270, March.
    18. Marcus, Matityahu, 1969. "Profitability and Size of Firm: Some Further Evidence," The Review of Economics and Statistics, MIT Press, vol. 51(1), pages 104-07, February.
    19. Backus, David K. & Kehoe, Patrick J. & Kehoe, Timothy J., 1992. "In search of scale effects in trade and growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 377-409, December.
    20. Fujita, Masahisa & Thisse, Jacques-François, 1996. "Economics of Agglomeration," CEPR Discussion Papers 1344, C.E.P.R. Discussion Papers.
    21. Gröhn, Andreas, 1996. "Netzwerkeffekte in der Software-Industrie: Eine Analyse der empirischen Literatur," Kiel Working Papers 743, Kiel Institute for the World Economy (IfW).
    22. Hay, Donald Andrew, 1979. "The Location of Industry in a Developing Country: The Case of Brazil," Oxford Economic Papers, Oxford University Press, vol. 31(1), pages 93-120, March.
    23. Scotchmer, Suzanne & Thisse, Jacques-Francois, 1992. "Space and Competition: A Puzzle," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 26(3), pages 269-86, September.
    24. Raphael Bostic & Joshua Gans & Scott Stern, 1995. "Urban Productivity and Factor Growth in the Late Nineteenth Century," Urban/Regional 9507001, EconWPA.
    25. Carlton, Dennis W, 1983. "The Location and Employment Choices of New Firms: An Econometric Model with Discrete and Continuous Endogenous Variables," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 440-49, August.
    26. Cowan, Robin, 1988. "Nuclear Power Reactors: A Study In Technological Lock-In," Working Papers 88-33, C.V. Starr Center for Applied Economics, New York University.
    27. Abdel-Rahman, H. M., 1988. "Product differentiation, monopolistic competition and city size," Regional Science and Urban Economics, Elsevier, vol. 18(1), pages 69-86, February.
    28. Hanson, Gordon H, 1996. "Localization Economies, Vertical Organization, and Trade," American Economic Review, American Economic Association, vol. 86(5), pages 1266-78, December.
    29. Keith Head & John Ries & Deborah Swenson, 1994. "Agglomeration Benefits and Location Choice: Evidence from Japanese Manufacturing Investment in the United States," NBER Working Papers 4767, National Bureau of Economic Research, Inc.
    30. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
    31. Michael Spence, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," Review of Economic Studies, Oxford University Press, vol. 43(2), pages 217-235.
    32. Irwin, Douglas A & Klenow, Peter J, 1994. "Learning-by-Doing Spillovers in the Semiconductor Industry," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1200-1227, December.
    33. Tibor Scitovsky, 1954. "Two Concepts of External Economies," Journal of Political Economy, University of Chicago Press, vol. 62, pages 143.
    34. Henderson I. Vernon, 1994. "Where Does an Industry Locate?," Journal of Urban Economics, Elsevier, vol. 35(1), pages 83-104, January.
    35. Garcia-Mila, Teresa & McGuire, Therese J., 1993. "Industrial mix as a factor in the growth and variability of states' economies," Regional Science and Urban Economics, Elsevier, vol. 23(6), pages 731-748, December.
    36. Herbert Glejser & Alexis Jacquemin & Jean Petit, 1980. "Exports in an Imperfect Competition Framework: An Analysis of 1,446 Exporters," The Quarterly Journal of Economics, Oxford University Press, vol. 94(3), pages 507-524.
    37. Jonathan Eaton & Gene M. Grossman, 1983. "Optimal Trade and Industrial Policy Under Oligopoly," NBER Working Papers 1236, National Bureau of Economic Research, Inc.
    38. Nobuhiro Kiyotaki, 1988. "Multiple Expectational Equilibria Under Monopolistic Competition," The Quarterly Journal of Economics, Oxford University Press, vol. 103(4), pages 695-713.
    39. Antonio Ciccone & Robert E. Hall, 1995. "Productivity and the density of economic activity," Economics Working Papers 120, Department of Economics and Business, Universitat Pompeu Fabra.
    40. S. J. Liebowitz & Stephen E. Margolis, 1994. "Network Externality: An Uncommon Tragedy," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 133-150, Spring.
    41. Devereux, Michael B & Head, Allen C & Lapham, Beverly J, 1996. "Monopolistic Competition, Increasing Returns, and the Effects of Government Spending," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(2), pages 233-54, May.
    42. Siebert, Horst, 1992. "Standortwettbewerb - nicht Industriepolitik," Open Access Publications from Kiel Institute for the World Economy 1542, Kiel Institute for the World Economy (IfW).
    43. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    44. Matthew D. Shapiro, 1987. "Measuring Market Power in U.S. Industry," NBER Working Papers 2212, National Bureau of Economic Research, Inc.
    45. Hornstein, Andreas, 1993. "Monopolistic competition, increasing returns to scale, and the importance of productivity shocks," Journal of Monetary Economics, Elsevier, vol. 31(3), pages 299-316, June.
    46. Henderson, Vernon & Kuncoro, Ari & Turner, Matt, 1995. "Industrial Development in Cities," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1067-90, October.
    47. Zvi Griliches, 1998. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 17-45 National Bureau of Economic Research, Inc.
    48. Auquier, Antoine A, 1980. "Sizes of Firms, Exporting Behavior, and the Structure of French Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 29(2), pages 203-18, December.
    49. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-37, May.
    50. Gali, J., 1991. "Monopolistic Competition, Business Cycles and the Composition of Aggregate Demand," Papers 92-03, Columbia - Graduate School of Business.
    51. Horstmann, Ignatius J. & Markusen, James R., 1986. "Up the average cost curve: Inefficient entry and the new protectionism," Journal of International Economics, Elsevier, vol. 20(3-4), pages 225-247, May.
    52. Henderson, J. Vernon, 1986. "Efficiency of resource usage and city size," Journal of Urban Economics, Elsevier, vol. 19(1), pages 47-70, January.
    53. Caballero, Ricardo J. & Lyons, Richard K., 1990. "Internal versus external economies in European industry," European Economic Review, Elsevier, vol. 34(4), pages 805-826, June.
    54. Smith, V Kerry, 1986. "Another View of the State of Engineering Production Functions," Economica, London School of Economics and Political Science, vol. 53(212), pages 529-32, November.
    55. Burnside, Craig, 1996. "Production function regressions, returns to scale, and externalities," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 177-201, April.
    56. Ringstad, Vidar, 1978. " Economies of Scale and the Form of the Production Function: Some New Estimates," Scandinavian Journal of Economics, Wiley Blackwell, vol. 80(3), pages 251-64.
    57. Christensen, Laurits R & Greene, William H, 1976. "Economies of Scale in U.S. Electric Power Generation," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 655-76, August.
    58. Rees, R D, 1973. "Optimum Plant Size in United Kingdom Industries: Some Survivor Estimates," Economica, London School of Economics and Political Science, vol. 40(160), pages 394-401, November.
    59. Segal, David, 1976. "Are There Returns to Scale in City Size?," The Review of Economics and Statistics, MIT Press, vol. 58(3), pages 339-50, August.
    60. Kanemoto, Yoshitsugu & Ohkawara, Toru & Suzuki, Tsutomu, 1996. "Agglomeration Economies and a Test for Optimal City Sizes in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 10(4), pages 379-398, December.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:kie:kieliw:813. 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: (Dieter Stribny)

    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.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.