Economies of Scale in Theory and Practice

Silberston, Aubrey

doi:10.2307/2229943

Cited by 129 publications

(32 citation statements)

References 2 publications

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“…al., 1975Scherer et. al., , 1980Pratten, 1971;Silberston, 1972;Townroe and Roberts, 1980;Wibe, 1984). Firstly, multi-plant enterprises may benefit from any economies of scale (or scope) to a greater extent when compared to single-plant firms, especially in industries which serve a large geographic market and where transport costs are relatively high, since they are able to locate plants close to their markets.…”

Section: Multi-plant Economies Of Scale and Competition Effectsmentioning

confidence: 99%

Plant-level determinants of total factor productivity in Great Britain, 1997–2008

Harris

Moffat

2015

J Prod Anal

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AcknowledgementsThis work contains statistical data from ONS which is Crown copyright and reproduced with the permission of the controller of HMSO and Queen's Printer for Scotland. The use of the ONS statistical data in this work does not imply the endorsement of the ONS in relation to the interpretation or analysis of the statistical data. This work uses research datasets which may not exactly reproduce National Statistics aggregates. Abstract This paper examines the determinants of total factor productivity (TFP) using a GB plantlevel dataset. Using a systems-GMM approach, it considers the role of the following four plant characteristics: internal and external knowledge; foreign ownership, multi-plant economies of scale and competition; and spatial spillovers and 'place' effects. The sample is disaggregated into manufacturing and services and by technology to show any differences across sectors. In terms of knowledge, undertaking R&D is positively associated with TFP in most sectors. Plant age is generally negatively related to TFP suggesting that the older vintages of technology embodied in the capital of older plants is outweighing any learningby-doing effect. Foreign ownership is positively related to TFP although there is no obvious TFP ranking in terms of which investing country does better, or in terms of the method by which FDI is undertaken. Manufacturing industries are generally found to operate under conditions of increasing returns-to-scale while service industries generally have decreasing returns. Across most sectors, single plant enterprises have higher TFP than plants belonging to multi-plant enterprises operating in only one region, but lower TFP than plants belonging to multi-plant enterprises with plants in more than one region. Industry concentration (proxying competition) has both positive and negative impacts on TFP across sectors. The agglomeration variable is generally positive and significant for services but less so in manufacturing. A measure of diversification is negatively related to TFP for most sectors although this association is only statistically significant for four out of eight sectors. This may suggest that congestion diseconomies are important. Plants located in cities generally perform better than plants in the same region outside of these cities; but with the exception of London, plants in the South-East have higher TFP levels. This suggests that spatial externalities associated with city location are not as important as the benefits of being situated in the South East region.

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Section: Multi-plant Economies Of Scale and Competition Effectsmentioning

confidence: 99%

Plant-level determinants of total factor productivity in Great Britain, 1997–2008

Harris

Moffat

2015

J Prod Anal

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“…Studies examining economies of scale are not limited to industries in the United States. Silberston [1972] examined a wide array of manufacturing industries in the U.K. and found significant economies of scale due to increased size as well as to how scale interacts with initial fixed costs, working capital, the specialization of labor, vertical linkages, and the specialization of plant equipment to influence overall firm performance. Another study examining Australian manufacturing industries found a single minimum optimal firm size in many of the industries that were studied, indicating that some of the smaller firms operating below optimum size in these industries were at a disadvantage in terms of absolute cost per unit [Round, 1975].…”

Section: Economies Of Scalementioning

confidence: 99%

Does Size Matter? Economies Of Scale In The Banking Industry

Stimpert

Laux

2011

JBER

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“…A central premise of economies of scale is that specialization coupled with congruent work volumes increase productivity (Canback, Samouel, & Price, 2006;Silberston, 1972;Smith, 1776). An example of economies of scales in the IT conversion process could be the outsourcing of technologically-stable systems to large scale application service providers (Lacity & Willcocks, 2001).…”

Section: Economies Of Scale In Business and Itmentioning

confidence: 99%

Resource Complementarity and IT Economies of Scale: Mechanisms and Empirical Evidence

Woudstra

Berghout

Tan

et al. 2017

Information Systems Management

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In this study, we explore economies of scale for IT infrastructure and application services. An indepth appreciation of economies of scale is imperative for an adequate understanding of the impact of IT investments. Our findings indicate that even low IT spending organizations can make a difference by devoting at least 60% of their total IT budget on IT infrastructure in order to foster economies of scale and extract strategic benefits.

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Economies of Scale in Theory and Practice

Cited by 129 publications

References 2 publications

Plant-level determinants of total factor productivity in Great Britain, 1997–2008

Plant-level determinants of total factor productivity in Great Britain, 1997–2008

Does Size Matter? Economies Of Scale In The Banking Industry

Resource Complementarity and IT Economies of Scale: Mechanisms and Empirical Evidence

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