Returns to Scale: Concept, Estimation and Analysis of Japan’s Turbulent 1964–88 Economy

35 Pages Posted: 5 May 2011

See all articles by W. Erwin Diewert

W. Erwin Diewert

affiliation not provided to SSRN

Takanobu Nakajima

Keio University - Faculty of Business and Commerce

Alice Orcutt Nakamura

University of Alberta - School of Business

Emi Nakamura

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

Masao Nakamura

University of British Columbia (UBC) - Sauder School of Business

Date Written: May 2011

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 196488 are presented. Our study spans the high growth era of the 1960s, two oil shocks, and other exogenous shocks.

Il y a intrt en politique publique identifier les composantes de la croissance de la productivit attribuables au progrs technique et aux rendements lchelle. Lapproche utilise les mthodes des nombres indices exacts pour rduire les paramtres qui doivent tres estims, et pouvoir exploiter la dimension transversale des donnes de panel au niveau de ltablissement. On montre que la mme quation peut tre utilise pour estimer les indicateurs dconomies dchelle et de progrs technique la Harberger (lesquels ncessitent un plus petit nombre de postulats). On prsente des valuations de llasticit dchelle pour des tablissements japonais dans trois industries importantes entre 1964 et 1988.Ltude couvre la priode de forte croissance des annes 1960, celle des deux chocs ptroliers et dautres chocs exognes.

JEL Classification: C43, D24

Suggested Citation

Diewert, W. Erwin and Nakajima, Takanobu and Nakamura, Alice Orcutt and Nakamura, Emi and Nakamura, Masao, Returns to Scale: Concept, Estimation and Analysis of Japan’s Turbulent 1964–88 Economy (May 2011). Canadian Journal of Economics/Revue canadienne d'conomique, Vol. 44, Issue 2, pp. 451-485, 2011, Available at SSRN: https://ssrn.com/abstract=1832148 or http://dx.doi.org/10.1111/j.1540-5982.2011.01640.x

W. Erwin Diewert (Contact Author)

affiliation not provided to SSRN

No Address Available

Takanobu Nakajima

Keio University - Faculty of Business and Commerce ( email )

2-15-45 Mita
Minato-ku
Tokyo 108-8345
Japan

Alice Orcutt Nakamura

University of Alberta - School of Business ( email )

2-32C Business Building
Edmonton, Alberta T6G 2R6
Canada

Emi Nakamura

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Masao Nakamura

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada
604-822-8434 (Phone)
604-822-8477 (Fax)

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