Returns to scale: Concept, estimation and analysis of Japan's turbulent 1964-88 economy

W. Erwin Diewert, Takanobu Nakajima, Alice Nakamura, Emi Nakamura, Masao Nakamura

Research output: Contribution to journalArticlepeer-review

7 Citations (Scopus)

Abstract

There is policy interest in factoring productivity growth into technical progress and returns to scale components. Our approach uses exact index number methods to reduce the parameters that must be estimated, and allows us to exploit the cross-sectional dimension of plant-level panel data. We show that the same equation can also be used to estimate 'Harberger' scale economies and technical progress indicators that require fewer assumptions. Estimates of the elasticity of scale for Japanese establishments in three major industries over 1964-88 are presented. Our study spans the high growth era of the 1960s, two oil shocks, and other exogenous shocks.

Original languageEnglish
Pages (from-to)451-485
Number of pages35
JournalCanadian Journal of Economics
Volume44
Issue number2
DOIs
Publication statusPublished - 2011 May 1

ASJC Scopus subject areas

  • Economics and Econometrics

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