Factor substitution, technical change, and returns to scale in Canadian forest industries

1985 ◽  
Vol 15 (6) ◽  
pp. 1116-1124 ◽  
Author(s):  
Felice Martinello
Keyword(s):  
Technical Change ◽  
Returns To Scale ◽  
Cost Savings ◽  
Pulp And Paper ◽  
Increasing Returns ◽  
Annual Data ◽  
Increasing Returns To Scale ◽  
Input Demand ◽  
Forest Industries ◽  
Factor Substitution

This paper reports estimates of factor substitution, technical change, and returns to scale for three Canadian industries, pulp and paper, sawmills and shingle mills, and logging, using annual data from 1963 to 1982. Each industry's input-demand functions slope down and are inelastic. Factor substitution is not rejected in any of the industries but it is not large. Sawmills and shingle mills show moderate increasing returns to scale, while logging and pulp and paper show very large increasing returns to scale. The technology of the industries is nonhomothetic and cost savings as a result of changes in scale are made mostly on the capital and labour inputs. Technical change is nonneutral, capital using, and labour saving in all industries. Negative technical change is estimated for sawmills and shingle mills and pulp and paper so that all of the productivity gains made over the period of the sample are associated with changes in scale rather than the passage of time. The technical change in all industries is labour saving enough that labour becomes more productive over time, holding everything else constant.

INCREASING RETURNS TO SCALE, PRICE DISPERSION, AND THE DISTRIBUTION OF RETURNS TO INNOVATION

2014 ◽  
Vol 19 (2) ◽  
pp. 334-362
Author(s):  
Michael D. Makowsky ◽  
David M. Levy
Keyword(s):  
Technical Change ◽  
Firm Growth ◽  
Returns To Scale ◽  
Increasing Returns ◽  
Investment Strategies ◽  
Fat Tails ◽  
Agent Based ◽  
Increasing Returns To Scale ◽  
Distributional Properties ◽  
Research Investment

Models of endogenous growth have not been able to account for the variety of empirically observed distributional properties of the returns to innovation, in part, because of the limitations necessarily imposed on competition to cope with increasing returns to scale. Exponential growth, fat tails, Pareto–Levy distributed upper tails, and upper value outliers, are associated with increasing returns to scale and innovation. At the same time, properties such as bifurcated research investment strategies, bimodal returns to innovation, and Laplace distributed firm growth rates are products of competition. We build an agent-based model of endogenous technical change in which heterogeneous investments in patented knowledge and increasing returns to scale emerge these distributional properties within a competitive market. The combination of heterogeneous agents, costly information, and patents allow for a competitive landscape to persist amidst increasing returns. The ability of model to foster a coexistence of competition and increasing returns underlies the observed distributional properties.

scholarly journals Returns to Scale for EU Regions – evidence from the spatial panel model

2017 ◽  
Vol 3 (329) ◽  
Author(s):  
Alicja Anna Olejnik
Keyword(s):  
Fixed Effects ◽  
Regional Growth ◽  
Returns To Scale ◽  
Increasing Returns ◽  
Increasing Returns To Scale ◽  
Spatial Panel ◽  
Panel Model ◽  
Eu Regions ◽  
Spatial Panel Model ◽  
The Eu

Recent findings emphasise the importance of localised returns to scale for the regional growth as well as for the agglomeration processes. However, it is still not well established whether returns to scale are constant or increasing, and to what extent. Therefore, in this study we apply specification which describes the productivity growth with the growth of output through the Verdoorn’s law. This study aims to provide some new estimates of the degree of returns to scale for EU regions. Our findings show that the hypothesis of increasing returns to scale is still valid in today’s EU economy. To test the hypothesis, we have employed the Multidimensional Spatial Panel Durbin Model with Spatial Fixed Effects. The research is conducted for 261 regions of the EU 28. The paper concludes that increasing returns to scale in EU regions are substantial.

Network Effects

2010 ◽  
pp. 1007-1013
Author(s):  
Erik den Hartigh
Keyword(s):  
Network Effects ◽  
Returns To Scale ◽  
Increasing Returns ◽  
Increasing Returns To Scale ◽  
The Subject

From the 1980s, network effects attracted a lot of interest in economics and management sciences. This was mainly due to the work of Arthur (e.g., 1988, 1989, 1990). While the subject of increasing returns to scale in companies had a long tradition in economics, network effects (i.e., increasing returns in markets) had hardly been addressed.

scholarly journals Decomposition Analysis of Factor Cost Shares: The Case of Greek Agriculture

1996 ◽  
Vol 28 (2) ◽  
pp. 369-379 ◽  
Author(s):  
Giannis Karagiannis ◽  
Stelios Katranidis ◽  
Kostas Velentzas
Keyword(s):  
Scale Effect ◽  
Technical Change ◽  
Decomposition Analysis ◽  
Demand Functions ◽  
Input Demand ◽  
Alternative Version ◽  
Factor Substitution

AbstractAn alternative version of decomposition analysis, based on factor cost shares rather than input demand functions, is presented and applied to Greek agriculture. Decomposition analysis shows that most of the changes in factor cost shares during the period from 1973 to 1989 are attributed to technical change and factor substitution, while the role of the scale effect is small, except that of fertilizer. The decomposition analysis results are then used to analyze the implications of Greece's fertilizer and feed subsidy removal, which took place in 1990.

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