Empirical Study on Economies of Scale in China Manufacturing

Author:

Lingyao WANG,Yaodong ZHOU

Abstract

The paper is based on Chinese industrial enterprises database, applying the method of translog cost function to measure the economies of scale in manufacturing during the period between 2000 to 2013. The result shows that the mean of scale economies (SCE) is between 0.993 and 0.996, which indicates slight diseconomies of scale. From the perspective of the SCE variation trend, before 2010, there was a decreasing trend year by year, and the variation remained stable after 2010. Considering manufacturing heterogeneity, the paper divides manufacturing into nine groups to measure economies of scale. The group measurement results show that mining industry and light industry have high economies of scale, but in a decreasing state, other sub-sectors show slight diseconomies of scale and in a stable state.

Publisher

EDP Sciences

Reference8 articles.

1. YUAN Guiqiu, ZHANG Lingdan. An Anlysis of factors influencing Scale Economy of the Manufacturing in China [J]. The Journal of Quantitative & Technical Economics, 2010 (3): 42-54.

2. ZHU Yan. Study on the Relationship between Economies of Scale and Asset Structure of Listed Manufacturing Companies [D]. Dalian: Dalian University of Technology, 2013.

3. Anguo L., Ge G., Kaizhong Y. Returns to scale in the production of selection manufacturing sectors in China [J]. Energy Procedia, 2011, 5: 604-612.

4. ZHANG Lingdan, An Anlysis of factors influencing Scale Economy of the Manufacturing in China [D]. Hangzhou: Zhejiang Gongshang University, 2010.

5. Lila J. Truett, Dale B.Truett. A cost-based analysis of scale economies in the French auto industry[J]. International Review of Economics and Finance, 2007, 16: 369-382.

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