Efficiency, productivity and returns to scale economies in South Africa’s healthcare insurance market

2021 ◽  
pp. 1-20
Author(s):  
Thabang Ndlovu
Keyword(s):  
Returns To Scale ◽  
Scale Economies ◽  
Insurance Market ◽  
Healthcare Insurance

The evidence on the existence of economies Of scale in local government units

2017 ◽  
Vol 1 (2) ◽  
pp. 379 ◽  
Author(s):  
Primož Pevcin
Keyword(s):  
Local Government ◽  
Economies Of Scale ◽  
Returns To Scale ◽  
Scale Economies ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Administrative Costs ◽  
Government Operation ◽  
Major Reform ◽  
Limited Scale

<p>The purpose of this paper is to empirically verify if the possible existence of scale economies actually supports the argument that municipal consolidation is needed in Slovenia. The major reform of local self-government in Slovenia was implemented in 1994, when the transformation of existing 58 »communal« municipalities was envisaged. From 1995 onwards, the number of municipalities increased to the current number of 212 municipalities. Consequently, the necessity to implement structural reforms of local self-government in Slovenia has been stressed. The arguments favoring municipal amalgamations stressed that country has become too fragmented and municipal amalgamation would enable the reduction of (administrative) costs, and increase efficiency as well as quality of services provided, indicating that technical aspects of local government operation are targeted. Following, technical efficiency of Slovenian municipalities is estimated with the Data Envelopment Analysis (DEA) method, in order to determine if (and which) municipalities are experiencing increasing returns to scale (i.e., scale economies). The results indicate that there is important scale efficiency component, and predominantly very small municipalities are experiencing economies of scale, but their number is relatively low. Therefore, one of the classical arguments for municipal amalgamation, achieving economies of scale, can only be applied at a limited scale. This does not imply that more extensive amalgamation is not warranted, but it demands that other arguments justifying municipal amalgamation should be presented.  </p>

A Note on the Relationship among the Shape of the Production Possibility Frontier, ‘Returns to Scale’ and ‘Returns to Factors’ under Cobb–Douglas Production Function

2016 ◽  
Vol 4 (2) ◽  
pp. 173-184 ◽  
Author(s):  
Merter Mert
Keyword(s):  
Production Function ◽  
Economies Of Scale ◽  
Returns To Scale ◽  
Scale Economies ◽  
Production Possibility ◽  
Production Possibility Frontier ◽  
The Relationship ◽  
Douglas Production Function

The purpose of this study is to examine relationship among returns to scale, returns to factors and the shape of the production possibility frontier under Cobb–Douglas production function. The study asks the following question: How can production possibility frontier be drawn (a) if returns to scale are constant, increasing and decreasing and (b) if returns to factors are constant, increasing and decreasing? The main finding of the study is as follows: When (a) returns to factors are constant or increasing or decreasing and (b) returns to scale (economies of scale internal to the firm) are constant or increasing or decreasing, the production possibility frontier can be bowed in or bowed out or be linear under certain conditions.

Specialization versus competition: an anatomy of increasing returns to scale

2020 ◽  
Author(s):  
Alberto Bucci ◽  
Philip Ushchev
Keyword(s):  
Monopolistic Competition ◽  
Market Competition ◽  
Returns To Scale ◽  
Sufficient Conditions ◽  
Scale Economies ◽  
Increasing Returns ◽  
Elasticity Of Substitution ◽  
Constant Elasticity ◽  
Full Characterization ◽  
The Rich

Abstract We develop a model of monopolistic competition with a differentiated intermediate good and variable elasticity of technological substitution. The model allows to study the nature and origins of external increasing returns. We single out two sources of scale economies: specialization and competition. The former depends only on how total factor productivity (TFP) varies with input diversity, while the latter is fully captured by the behavior of the elasticity of substitution across inputs. This distinction gives rise to a full characterization of the rich array of competition regimes in our model. The necessary and sufficient conditions for each regime to occur are expressed in terms of the relationships between TFP and the elasticity of substitution as functions of the input diversity. Moreover, we demonstrate that, despite the folk wisdom resting on constant elasticity of substitution models, specialization economies are in general neither necessary nor sufficient for external increasing returns to emerge. This highlights the profound and nontrivial role of market competition in generating agglomeration economies and other phenomena driven by scale economies.

Economies of Scale and Farm Size in the Antebellum Sugar Sector

1977 ◽  
Vol 37 (4) ◽  
pp. 959-980 ◽  
Author(s):  
Mark D. Schmitz
Keyword(s):  
Economies Of Scale ◽  
Returns To Scale ◽  
Scale Economies ◽  
Increasing Returns ◽  
Farm Size ◽  
Sugar Production ◽  
Steam Power ◽  
Increasing Returns To Scale ◽  
Plantation Economy ◽  
Manufacturing Stage

This article explains the emergence of a plantation economy in the antebellum sugar sector. The hypothesis of increasing returns to scale was tested using a Zellner-Revankar generalized production function model. Economies of scale were found using samples from the manuscript censuses, but these scale economies diminished with size. A second important factor in explaining the size distribution of farms was the dual technology in the manufacturing stage of sugar production. Farms with inferior horse-power mills had poorer survival records and less flexibility in expansion than those using steam power mills.

scholarly journals Increasing Returns and All That: A View from Trade

2002 ◽  
Vol 92 (1) ◽  
pp. 93-119 ◽  
Author(s):  
Werner Antweiler ◽  
Daniel Trefler
Keyword(s):  
International Trade ◽  
Comparative Advantage ◽  
Returns To Scale ◽  
Scale Economies ◽  
Trade Flows ◽  
Increasing Returns ◽  
Large Database ◽  
Trade Data ◽  
Increasing Returns To Scale ◽  
Factor Endowments

Do scale economies help to explain international trade flows? Using a large database on output, trade flows, and factor endowments, we find that allowing for the presence of increasing returns to scale in production significantly increases our ability to predict international trade flows. In particular, using trade data, we find that a third of all goods-producing industries are characterized by increasing returns to scale. Thus, scale economies are a quantifiable and important source of comparative advantage.

An empirical investigation of efficiency and productivity in the Indian non-life insurance market

2019 ◽  
Vol 26 (7) ◽  
pp. 2343-2371 ◽  
Author(s):  
Ashiq Mohd Ilyas ◽  
S. Rajasekaran
Keyword(s):  
Life Insurance ◽  
Productivity Growth ◽  
Returns To Scale ◽  
Malmquist Index ◽  
Scale Economies ◽  
Content Type ◽  
Insurance Sector ◽  
Bootstrap Approach ◽  
Efficiency And Productivity ◽  
Practical Implications

Purpose The purpose of this paper is to analyse the performance of the Indian non-life (general) insurance sector in terms of efficiency, productivity and returns-to-scale economies. In addition to this, it identifies the determinants of efficiency. Design/methodology/approach This study employs a two-stage data envelopment analysis (DEA) bootstrap approach to estimate the level and determinants of efficiency. In the first stage, the DEA bootstrap approach is employed to estimate bias-corrected efficiency scores. In the second stage, the truncated bootstrapped regression is used to identify the effect of firm-level characteristics on the efficiency of insurers. Moreover, the bootstrapped Malmquist index is used to examine the productivity growth over the observation period 2005–2016. Findings The bootstrapped DEA results show that the Indian non-life insurance sector is moderately technical, scale, cost and allocative efficient, and there is a large opportunity for improvement. Moreover, the results reveal that the public insurers are more cost efficient than the private insurers. It is also evident that all the insurers irrespective of size and ownership type are operating under increasing returns to scale. Malmquist index results divulge an improvement in productivity of insurers, which is attributable to the employment of the best available technology. Bootstrapped DEA and bootstrapped Malmquist index results also show that the global financial crisis of 2008 has not severely affected the efficiency and productivity of the Indian non-life insurance sector. The truncated regression results spell that size and reinsurance have a statistically significant negative relationship with efficiency. It also shows a statistically significant positive age–efficiency relationship. Practical implications The results hold practical implications for the regulators, policy makers, practitioners and decision makers of the Indian non-life insurance companies. Originality/value This study is the first of its kind that comprehensively investigates different types of robust efficiency measures, determinants of efficiency, productivity growth and returns-to-scale economies in the Indian non-life insurance market for an extended time period.

Tariffs and industrialization in late nineteenth century America: the role of scale economies

2020 ◽  
Author(s):  
Yeo Joon Yoon
Keyword(s):  
Economies Of Scale ◽  
Returns To Scale ◽  
Scale Economies ◽  
Learning By Doing ◽  
Late Nineteenth Century ◽  
Nineteenth Century America ◽  
The Us ◽  
Manufacturing Growth ◽  
Constant Returns To Scale

Abstract I construct a general equilibrium model with economies of scale and learning-by-doing in manufacturing to quantify the effects of tariff that the US imposed on its manufacturing imports from 1870 to 1913. I find that the tariff positively contributes to US manufacturing growth, but the magnitudes are small. I also show that the cumulative welfare effect of the tariff is positive if there exists enough degree of learning-by-doing, a result contrary to the conventional wisdom that tariffs have welfare-deteriorating effects. The welfare-enhancing effect of the tariff disappears when I use a similarly constructed model, but with constant returns to scale in manufacturing. The result suggests that the assumption about technology is important for the welfare implication of the tariff.

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