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 Settlement scaling and increasing returns in an ancient society

2015 ◽  
Vol 1 (1) ◽  
pp. e1400066 ◽  
Author(s):  
Scott G. Ortman ◽  
Andrew H. F. Cabaniss ◽  
Jennie O. Sturm ◽  
Luís M. A. Bettencourt
Keyword(s):  
Population Size ◽  
Network Effects ◽  
Returns To Scale ◽  
Quantitative Relationship ◽  
Theoretical Work ◽  
Increasing Returns ◽  
Increasing Returns To Scale ◽  
Recent Theoretical Work ◽  
General Network ◽  
Parameter Values

A key property of modern cities is increasing returns to scale—the finding that many socioeconomic outputs increase more rapidly than their population size. Recent theoretical work proposes that this phenomenon is the result of general network effects typical of human social networks embedded in space and, thus, is not necessarily limited to modern settlements. We examine the extent to which increasing returns are apparent in archaeological settlement data from the pre-Hispanic Basin of Mexico. We review previous work on the quantitative relationship between population size and average settled area in this society and then present a general analysis of their patterns of monument construction and house sizes. Estimated scaling parameter values and residual statistics support the hypothesis that increasing returns to scale characterized various forms of socioeconomic production available in the archaeological record and are found to be consistent with key expectations from settlement scaling theory. As a consequence, these results provide evidence that the essential processes that lead to increasing returns in contemporary cities may have characterized human settlements throughout history, and demonstrate that increasing returns do not require modern forms of political or economic organization.

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.

Increasing returns to scale in the towns of early Tudor England

2020 ◽  
Vol 53 (3) ◽  
pp. 147-165
Author(s):  
Rudolf Cesaretti ◽  
José Lobo ◽  
Luis M. A. Bettencourt ◽  
Michael E. Smith
Keyword(s):  
Returns To Scale ◽  
Increasing Returns ◽  
Increasing Returns To Scale ◽  
Tudor England

OPTIMAL ENDOGENOUS GROWTH WITH NATURAL RESOURCES: THEORY AND EVIDENCE

2016 ◽  
Vol 20 (8) ◽  
pp. 2173-2209 ◽  
Author(s):  
Manh-Hung Nguyen ◽  
Phu Nguyen-Van
Keyword(s):  
Growth Rate ◽  
Natural Resources ◽  
Endogenous Growth ◽  
Production Function ◽  
Returns To Scale ◽  
Direct Proof ◽  
Increasing Returns ◽  
Equilibrium Path ◽  
Exhaustible Resource ◽  
Increasing Returns To Scale

This paper considers an optimal endogenous growth model where the production function is assumed to exhibit increasing returns to scale and two types of resource (renewable and nonrenewable) are imperfect substitutes. Natural resources, labor, and physical capital are used in the final goods sector and in the accumulation of knowledge. Based on results in the calculus of variations, a direct proof of the existence of an optimal solution is provided. Analytical solutions for the planner case, balanced growth paths, and steady states are found for a specific CRRA utility and Cobb–Douglas production function. It is possible to have long-run growth where both energy resources are used simultaneously along the equilibrium path. As the law of motion of the technological change is not concave, reflecting the increasing returns to scale, so that the Arrow–Mangasarian sufficiency conditions do not apply, we provide a sufficient condition directly. Transitional dynamics to the steady state from the theoretical model are used to derive three convergence equations of output intensity growth rate, exhaustible resource growth rate, and renewable resource growth rate, which are tested based on OECD data on production and energy consumption.

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