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Economies of scale: A survey of the empirical literature

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  • Junius, Karsten

Abstract

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.

Suggested Citation

  • Junius, Karsten, 1997. "Economies of scale: A survey of the empirical literature," Kiel Working Papers 813, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwkwp:813
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    2. Junius, Karsten, 1997. "The determinants of urban concentration," Kiel Working Papers 835, Kiel Institute for the World Economy (IfW).
    3. Stephen Fyfe & Mark Garner & George Vegh, 2013. "Mergers by Choice, Not Edict: Reforming Ontario's Electricity Distribution Policy," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 376, March.
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    More about this item

    Keywords

    Economies of Scale; Empirical Studies;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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