External scale economies in manufacturing sector of Pakistan: a comparison of large scale manufacturing sector of Sindh and Punjab

Sohail Zafar and Vaqar Ahmed ()
Authors registered in the RePEc Author Service: Sohail Zafar Qureshi ()

MPRA Paper from University Library of Munich, Germany

Abstract: This study investigates the external economies of scale in the manufacturing sector of Pakistan. The Return to scale is a property of the production function that indicates the relationship between proportionate change, in all inputs and resulting change in output. Returns to scale are applicable only in the long run, since all inputs are being changed. The estimated value of the coefficient of returns to scale at aggregate level is 1.017. It means that one percentage point change in all input quantities results in 1.017 percent change in output. It turns out that manufacturing sector of Pakistan is characterized by almost constant returns to scale at aggregates and disaggregate level.

Keywords: Economies of Scale; Distortion; Efficiency; Pakistan (search for similar items in EconPapers)
JEL-codes: D51 E23 R32 (search for similar items in EconPapers)
Date: 2009-10-04
New Economics Papers: this item is included in nep-cwa, nep-eff and nep-mac
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