Scale Economies and Industry Agglomeration Externalities: A Dynamic Cost Function Approach

1999 ◽  
Vol 89 (1) ◽  
pp. 272-290 ◽  
Author(s):  
Catherine J. Morrison Paul ◽  
Donald S Siegel
Keyword(s):  
Cost Function ◽  
Scale Effects ◽  
Scale Economies ◽  
Cost Savings ◽  
Manufacturing Cost ◽  
Industry Agglomeration ◽  
Agglomeration Externalities ◽  
Long Run ◽  
Agglomeration Effects ◽  
Determinants Of Economic Growth

Scale economies and agglomeration externalities are alleged to be important determinants of economic growth. To assess these effects, we outline and estimate a microfoundations model based on a dynamic cost function specification. This model provides for the separate identification of the impacts of externalities and cyclical utilization on short- and long-run scale economies and input substitution patterns. We find that scale economies are prevalent in U.S. manufacturing, cost savings and scale effects often attributed to internal inputs may be due to external factors, and supply-side agglomeration effects are greater than demand-side, especially in the long run. (JEL O47, E23)

Empirical Literature on Economic Growth, 1991–2020: Uncovering Extant Gaps and Avenues for Future Research

2021 ◽  
pp. 097491012110616
Author(s):  
Natalia I. Doré ◽  
Aurora A. C. Teixeira
Keyword(s):  
Economic Growth ◽  
Latin American ◽  
Empirical Studies ◽  
Empirical Literature ◽  
Future Research ◽  
Long Run ◽  
Scientific Attention ◽  
The Impact ◽  
Determinants Of Economic Growth ◽  
Latin American And Caribbean

The factors required to achieve sustainable economic growth in a country are debated for decades, and empirical research in this regard continues to grow. Given the relevance of the topic and the absence of a comprehensive, systematic literature review, we used bibliometric techniques to examine and document several aspects in the empirical literature related to growth, from 1991 to 2020. Five main results are worth highlighting: (a) the share of empirical articles on economic growth show a clear upward trend; (b) among all the groups of countries considered, the emerging economies (EEs) have received the most scientific attention; (c) the economic growth processes of the Latin American and Caribbean EEs have observed negligible scientific attention; (d) the very long-run studies comprise a residual share among the empirical literature on growth; (e) the extant empirical studies on economic growth have addressed mainly the impact of “macroeconomic conditions.” Our findings suggest there is a need to redirect the empirical growth agenda, so as to encourage more scientific attention devoted to the analysis of key determinants of economic growth in the very long run. There should also be increased scrutiny of the processes of economic growth in Latin American and Caribbean EEs

scholarly journals ESTIMATING PROFIT , COST FUNCTION AND TECHNICAL EFFICIENCIES OF RICE PRODUCTION IN NEJAF FOR SEASON 2016*

2019 ◽  
Vol 50 (5) ◽  
Author(s):  
Al-Mashhdani & Mahmood
Keyword(s):  
Cost Function ◽  
Output Level ◽  
Average Output ◽  
Optimal Output ◽  
Long Run ◽  
Actual Output ◽  
Short Run ◽  
Profit Maximizing ◽  
Economic Price ◽  
The Cost

The aim of this study was to estimate the profit and cost functions as well as economic, price, cost, and technical efficiencies beside the other economic indices at actual, optimal and profit-maximizing output of rice. A random sample of 240 rice  farms in Nejaf province was used during the agricultural season 2016. From efficiency scales of profit function, it was shown that the output quantity had the greatest impact on the profit compared to other variables (average output costs and price). According to the cost function, the optimum output level and the profit- maximizing output  level for the short run were 64.84 tons and 117.4 tons respectively. The lowest price that the farmer can accept was 194.83 thousand dinars / ton. At this price, the producer loss all fixed costs in the short run, hoping that the price of rice will improve in the long run. Net profit was estimated on the basis of actual output, cost minimizing output (optimal) and profit-maximizing output, which amounted to 8084.32, 30852.65 and 45547.5 thousand dinars, respectively. The of technical efficiency were 34%. and the cost efficiency was 0.52. We conclude from the study that economic resources have not been exploited optimally, indicating that actual output is far from optimal output. The study recommends a output policy aimed at increasing economic efficiency and optimizing the use of available resources.

Does transportation infrastructure impact economic growth in India?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sreenu Nenavath
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Positive Impact ◽  
Transport Infrastructure ◽  
Causality Test ◽  
Content Type ◽  
Long Run ◽  
Short Run ◽  
The Government ◽  
Determinants Of Economic Growth

Purpose This paper aims to show a long run and causal association between economic growth and transport infrastructure. Design/methodology/approach In this study, the authors use ARDL models through the period 1990 – 2020 to investigate the relationship between transport infrastructure and economic growth in India. Findings The infrastructure has a positive impact on economic growth in India for the long run. Moreover, Granger causality test demonstrates a unidirectional relationship between transport infrastructure to economic development. Stimulatingly, the paper highlights the effect of air infrastructure statistically insignificant on economic growth in the long and short-run period. Originality/value The original outcome from the study delivers an inclusive depiction of determinants of economic growth from transport infrastructure in India, and these findings will help the policymakers to frame policies to improve the transport infrastructure. Hence, it is proposed that the government of Indian should focus more to upsurge the transport infrastructure for higher economic development.

Impacts of Rail Transit Accessibility on Firm Spatial Distribution: Case Study in the Metropolitan Area of Washington, DC

2019 ◽  
Vol 2673 (11) ◽  
pp. 220-232
Author(s):  
Hiroyuki Iseki ◽  
Hyunjoo Eom
Keyword(s):  
Metropolitan Area ◽  
Industrial Development ◽  
Public Transit ◽  
Agglomeration Economies ◽  
Rail Transit ◽  
Washington Dc ◽  
Transit Oriented Development ◽  
Industry Agglomeration ◽  
Positive Effects ◽  
Agglomeration Effects

Agglomeration economies can arise in areas with high concentrations of firms, which can be facilitated by improved transportation accessibility. Accessibility can be improved by public transit infrastructure, especially in combination with careful planning for transit-oriented development (TOD) that creates compact, high density, mixed-use, and pedestrian-friendly built environments in proximity to public transit infrastructure. Although the literature on TOD has increasingly shown positive effects on residential development and property values, its effects on commercial and industrial development, location of firms, and associated agglomeration economies are less clear and require more empirical study. This study analyzes firm location patterns by industry/sector in the metropolitan area of Washington, DC and examines whether significant spatial clusters have developed in relation to: 1) the presence of Metrorail stations; and 2) the presence of specific industry firms in the earlier year, using kernel density analysis and multinomial logit (MNL) regression. The analysis results indicated that firms in certain industries, such as finance and insurance/real estate and public administration, are more likely to benefit from proximity to Metrorail stations than other industries. Furthermore, firms in several industries show the effects of agglomeration within the same industry while several combinations of industries exhibit cross-industry agglomeration effects. The findings of this study contribute to the understanding of which industry sectors are more likely to be located in proximity to rail transit stations and TOD areas and to the understanding of agglomeration effects within the same industry and between different industries.

Are Biopharmaceutical Budget Caps Good Public Policy?

2016 ◽  
Vol 13 (1) ◽  
Author(s):  
Dana P. Goldman ◽  
Darius N. Lakdawalla ◽  
James R. Baumgardner ◽  
Mark T. Linthicum
Keyword(s):  
Cost Savings ◽  
Healthcare Spending ◽  
Short Term ◽  
The Past ◽  
Long Run ◽  
The Status ◽  
Pharmaceutical Spending ◽  
Health Returns ◽  
New Research

AbstractMedical innovation has generated significant gains in health over the past decades, but these advances have been accompanied by rapid growth in healthcare spending. Faced with a growing number of high-cost but high-impact innovations, some have argued to constrain prices for new therapies – especially through global caps on pharmaceutical spending and limits on prices for individual drugs. We show that applying this threshold to past innovations would have limited access to many highly valuable drugs such as statins and anti-retrovirals. We also argue that budget caps violate several important principles of health policy. First, budget caps treat healthcare spending as a consumption good, like going to a movie or buying a meal. However, healthcare spending should be viewed as an investment, whose benefits accrue over many years – much like spending on education. Second, budgetary cost is a poor indicator of value, thereby distorting coverage decisions. Third, affordability arguments often use a short-term horizon, thereby missing that long-term health is society’s ultimate goal. Fourth, assessments of benefit should incorporate not just the immediate clinical benefit to patients, but also long-term health improvements, cost savings, and increased productivity. Fifth, global budget caps arbitrarily anchor spending on the status quo, thereby setting too stringent a threshold for socially-desirable innovation. In sum, a solitary focus on short-term costs can be detrimental to population health in the long-run. When medical treatment decisions are properly viewed as investments, budget caps are not the answer; rather, we need to find mechanisms to encourage spending decisions based on long-term value. Only then can we generate health returns to societal investments, while also encouraging the new research and development necessary to extend the gains of recent decades.

An Analysis on the Scale Economies and Scope Economies after the Reorganization of China Unicom

2011 ◽  
Vol 474-476 ◽  
pp. 355-360
Author(s):  
Jian Na Zhao ◽  
Xin Qiao Zhang
Keyword(s):  
Cost Function ◽  
Scale Economies ◽  
Natural Monopoly ◽  
Scope Economies ◽  
Basic Character ◽  
Telecom Industry ◽  
China Unicom

Telecom industry, characterized by techno- economic, presents some features of scale economies and scope economies on the basic character of its natural monopoly. The question is whether it continues to exist after the reorganization of the Telecom industry. This paper mainly analyzes the features of scale economies and scope economies after the reorganization of China Unicom on the application of transcendental logarithmic cost function to show the existence of scale economies and scope economies after the reorganization.

A Modification of the Modified Stollsteimer Location Moled

1975 ◽  
Vol 7 (1) ◽  
pp. 159-164 ◽  
Author(s):  
Stephen Fuller
Keyword(s):  
Cost Function ◽  
Optimal Solution ◽  
Computer Time ◽  
Solution Procedure ◽  
Plant Location ◽  
Model Parameters ◽  
Basic Model ◽  
Long Run ◽  
Large Numbers ◽  
Cost Parameters

The Stollsteimer plant location model is a normative tool appropriate for deterrmning least-cost number, size and location of a subindustry's marketing facilities. Several modification and extensions of the basic model have increased its value to the applied economist. Ladd and Halvorson developed a procedure to determine sensitivity of the optimal solution to variation in model parameters, i.e., the researcher may resolve how magnitude cost parameters are altered before the solution becomes non-optimal. The basic model's solution procedure prevented application where large numbers of potential plant sites were involved. A recent modification by Warrack and Fletcher effects a reduction in required computer time by approximating optimization, thus increasing size of plant location problems investigated. Polopolus extended the basic model to encompass multiple product plants and, in collaboration with Chern, modified the basic Stollsteimer model to permit substitution of a discontinuous, long-run plant cost function for the strategically assumed continuous linear form. Prior to the latter modification, the basic model accommodated only a long-run total plant cost function which was linear with a positive intercept.

On the Challenges of Quieting a Freight Locomotive Cab Interior

2003 ◽  
Author(s):  
Mehdi Ahmadian
Keyword(s):  
Vibration Reduction ◽  
Cost Savings ◽  
Vibration Characteristics ◽  
Manufacturing Cost ◽  
Hydraulic Actuator ◽  
Noise And Vibration ◽  
Railway Industry ◽  
Business Perspective ◽  
Vibration Tests ◽  
Noise And Vibration Reduction

The primary purpose of this paper is to discuss some of the challenges—both from an engineering standpoint and economically—facing the railway industry in improving the noise and vibration characteristics in locomotive cabs. To this end, we will first establish the vibration characteristics of a typical locomotive cab used in freight locomotives in North America. Next, we will evaluate the effect of separating the cab structure from the reminder of the locomotive structure by elastomeric mounts. This cab configuration is commonly referred to as “soft-mounted cab,” in contrast to a “hard-mounted cab,” which is rigidly attached to the remainder of the locomotive structure. The structural dynamics of a production locomotive cab is studied in a laboratory environment. The cab is excited by a hydraulic actuator, in a manner closely resembling field inputs. After establishing the baseline vibrations of the cab, the study presents the results of vibration tests for the soft mounted cab. A comparison between the hard-mounted and soft-mounted cabs indicate that soft mounting the locomotive cab can result in substantial noise and vibration reduction at all locations in the cab, and therefore provide: • more crew comfort, • less equipment damage, and • manufacturing cost savings. The paper will also discuss the effect of the measures that are needed for quieting the cab, such as soft mounting it, on the locomotive manufacturers from an engineering and business perspective.

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