Cost efficiency and scale economies in the Turkish insurance industry

This article examines the cost efficiency and scale economies of insurance firms in the Turkish insurance industry over a 15-year period, 1990–2004. Using the stochastic cost frontier model, cost efficiency scores and scale economies were estimated for each firm in the sample. The results show that mean cost inefficiencies range between 18.3 and 36.9% of total costs and they do not tend to decrease over time. On average, small firms are more cost efficient than large firms. Economies of scale appear present and significant for any class size. The results suggest that there is a substantial difference in scale economies between small and large insurance firms.     

The Spanish automotive industry: scale economies and input relationships

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.     

A note on multiproduct economies of scale and economies of scope

Two measures of (local) economies of scale for a firm producing more than two products are derived using measures of product-specific economies of scale and economics of scope. The latter is especially useful for econometric estimation and testing.     

Input substitution,economies of scale and productivity growth in the US upholstered furniture industry

Cost, factor demand and productivity growth are considered in the upholstered furniture industry over 1958–87. Factors are divided into labour, capital and materials. It is found that all inputs are substitutes in production although substitution elasticities are small. Factor demand is price-inelastic for all inputs. The industry operates around minimum average cost. Productivity growth is small but significant. The results indicate that labour will continue to be important in the industry. However, regional comparative advantage is not related to labour alone; the results suggest that policies to attract or retain the industry must consider the low degree of factor substitution.     

浅析我国商业银行的规模经济效应

本文简要分析了我国商业银行的规模经济形成的原因,并且针对我国商业银行的规模经济遇到的问题及其应对策略做简要探析.     

Value allocation with economies of scale

The Aumann-Shapley Value allocation is shown to be in the Core of a benefit allocation game with non-decreasing returns to scale. The value coincides with the competitive allocation for a cost function that is homogeneous of degree one.     

Quality and economies of scale in higher education

This study attempts to develop and empirically estimate an average cost and output reltion for average total for higher education. Statistical results based on data for top PhD granting institutions suggest there are economies of scale in higher education. Academic reputation is also an important variable in explaining variations in average total cost.     

WTO框架下中国的汽车产业发展战略取向

进入21世纪以来,我国汽车生产进入了高速增长时期,从2000年到2002年世界六大汽车集团和三大独立汽车公司在中国合资创办了14家整车厂,形成汽车生产规模约60万辆。进入2003年以来,这种建厂势头有增无减,通用汽车、福特、戴姆勒-克莱斯勒、大众、丰田、尼桑-雷诺等和本田、宝马、PSA标致-雪铁龙标致等跨国汽车巨头频频出手,或增资扩建,或联合、兼并、重组,或合资建新厂,通过多种投资形式扩大在中国的生产规模。在外资纷纷进入中国汽车市场的同时,我国民营企业也借WTO之风向汽车产业挺进,如吉利汽车、长城汽车等。2003年美的、奥克斯和格林…     

中国汽车产业走向世界发展研究述评

加入ＷＴＯ ,中国汽车产业的未来发展史无前例地引来业内外学者专家的高度关注 ,迎接中国汽车市场更加开放的新阶段的挑战与机遇被认为是“冲击”、“危机” ,诸如技术冲击、资金冲击、品牌和质量冲击 ,等等。中国汽车产业的发展际遇、发展战略、因应策略也引来各方论争 ,在本文将援引大量的论点 ,并给予评述。一、中国汽车产业的战略地位的确立汽车产业在大国工业化进程中的战略作用 ,诺贝尔经济学奖获得者西蒙·库兹涅茨曾通过大量的实证研究给予了肯定。西蒙·库兹涅茨就 2 0世纪 6 0年代以前西方发达国家长期产业结构变化进行了综合分析…     

An update on economies of scale in credit unions

When employing the Benston-Bell-Murphy cost specification, most studies on economies of scale in financial institutions have consistently found small, yet significant economies. However, when a similar approach on credit unions was used, the results were conflicting. This paper, through the use of a different methodological and statistical approach, provides additional evidence on the existence of economies of scale in credit unions.     

Price uncertainty,economies of scale and the competitive firm

The supply correspondence of a competitive firm facing price uncertainty is characterized assuming the firm to be asymptotically risk averse.     

The healthy development of economies: A strategic framework for competitiveness in the health industry

Applying a strategic decision-making perspective on the economics of business, we suggest that a competitive locality in the health industry is one that, relative to other localities, is effective in: (1) providing the healthcare that enables everyone to participate fully in the democratic development of the locality; (2) providing the healthcare that is democratically identified as a direct objective of this development; (3) contributing through the health industry to any other democratically determined objectives of the locality's development. The paper hypothesizes that strategic decision-making in organizations is an especially significant determinant of the impacts of the health industry. We conclude that: (i) a locality that suffers concentration in the power to determine the objectives of its health industry could not be strictly competitive in that industry; (ii) the first best way to achieve competitiveness in the health industry would be to democratize its strategic decision-making. What this would entail in practice is discussed in some detail.     

Endogenous cost asymmetry and insufficient entry in the absence of scale economies

The paper by Ghosh and Saha (Econ Theory 30:575–586, 2007) shows that entry can be socially excessive even if there are no scale economies. We show that exogenous cost asymmetry is responsible for this result. In a simple model with R&D investment by the more cost efficient firm, thus creating endogenous cost asymmetry, we show that entry is socially insufficient instead of excessive if the slope of the marginal cost of R&D is not very high.     

Endogenous vs. exogenous comparative advantage and economies of specialization vs. economies of scale

This paper draws the distinctions between the concepts of endogenous and exogenous comparative advantages and between the concepts of economies of specialization and scale. A comparison between the equilibrium model endogenizing the degree of specialization and endogenous comparative advantages, neoclassical trade model with exogenous comparative advantages, and an extended Dixit-Stiglitz model with a tradeoff between economies of scale and transaction costs is used to explore the equilibrium implications of the distinctions.     

Efficiency and economies of scale of large Canadian banks

Abstract.  This paper measures the economies of scale of Canada's six largest banks and their cost-efficiency over time. Using a unique panel data set from 1983 to 2003, we estimate pooled cost functions and derive measures of relative efficiency and economies of scale. The disaggregation of the data allows us to include non-traditional outputs as well as time-varying, bank-specific effects. Our model leads us to reject constant returns to scale. These findings suggest there are potential scale benefits in the Canadian banking industry. We also find that technological and regulatory changes have had significant positive effects on the banks' cost structure.     

Economies of scale in the Australian tourism industry

The measurement of economies of scale in the tourism industry has not been done to this point, as tourism is not a specific industry according to international statistical standards. Among many industries related to tourism, four sectors (accommodation, transport, retail trade and recreational services) across six states and two territories from 1997 to 2007 are studied as they contribute nearly 70% of tourism output in Australia. By comparing regression results from the Cobb–Douglas (C–D) production function and the translog production function, we find that there is evidence of increasing returns in transport, retail trade and recreational services at the industry level. However, accommodation is characterized by constant returns to scale at the industry level. As accommodation is responsible for the biggest share of tourism output, this suggests that overall the tourism sector is not characterized by increasing returns. We also find that the degrees of returns to scale from the C–D and translog production functions are different and that the imposition of input share also influences the empirical results. Both of these factors stress the importance of model specification to the measurement of economies of scale.     

Service quality,scale economies and ownership: an econometric analysis of water supply costs

Issues related to service quality are crucial for water utility management and regulation. Omitting these aspects, especially when they are treated as exogenous, can lead to large biases in estimating cost functions as well as to misleading information concerning technology. In this article, we integrate the output multi-dimension in the cost function, considering delivered water volume and service quality as being endogenous. Network-related scale measures and private versus public ownership are investigated with the objective of evaluating how endogenous quality may affect their impact on costs. A translog cost model is estimated from a dataset of US water utilities. It is shown that including the quality level of the delivered services has a significant impact on scale economies and ownership effects. Significant economies of scope confirm the existence of trade-offs between water production and service quality.