Economies of Scale in European Manufacturing Revisited

35 Pages Posted: 1 Aug 2001

See all articles by Espen Henriksen

Espen Henriksen

Department of Financial Economics, BI Norwegian Business School

Karen Helene Ulltveit-Moe

University of Oslo - Department of Economics; Centre for Economic Policy Research (CEPR)

Frode Steen

Norwegian School of Economics (NHH) - Department of Economics

Date Written: July 2001

Abstract

We test for internal and external economies of scale in European manufacturing, employing a more disaggregated data set than has been used in earlier analyses. We aim to separate externalities from common business cycle effects. Fifteen European manufacturing industries in Germany, France, the U.K. and Italy are analysed. We focus on economies of scale at three levels: the national industry, the national industrial cluster and the transnational industry. Our results suggest that external economies of scale arising from inter-industry external effects and cross-country effects are less prevalent than increasing returns at the level of the industry and firm. Our results underscore the importance of the level of disaggregation in studies of internal and external economies of scale and argue that the external effects are highly country and industry specific.

Keywords: Internal and external economies of scale, new economic geography, clusters

JEL Classification: C33, D24, O47, R12

Suggested Citation

Henriksen, Espen and Ulltveit-Moe, Karen Helene and Steen, Frode, Economies of Scale in European Manufacturing Revisited (July 2001). Available at SSRN: https://ssrn.com/abstract=278583

Espen Henriksen (Contact Author)

Department of Financial Economics, BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway

Karen Helene Ulltveit-Moe

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Frode Steen

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway
+47 55 959 259 (Phone)
+47 55 959 543 (Fax)

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