Special Economic Zones and Agriculture with Increasing Returns

Soumyatanu Mukherjee

MPRA Paper from University Library of Munich, Germany

Abstract: This paper has made an attempt to show that in a developing economy, agriculture and Special Economic Zones (SEZ) can go simultaneously without affecting one another if appropriate subsidy policy is designed by the government. We have considered increasing returns brought about by external economies of scale in the SEZ-led industrial sector with the help of Dixit-Stiglitz (1977) type of production function where resource used to produce each variety of the SEZ-good is itself produced using constant returns to scale (CRS) technology and CRS is also present in the agricultural sector.

Keywords: Special Economic Zones; Increasing Returns; External Economies of Scale; Constant Returns to Scale; Dixit-Stiglitz type Production Function (search for similar items in EconPapers)
JEL-codes: C65 F12 F13 F16 J33 J43 Q17 (search for similar items in EconPapers)
Date: 2011-09-29
New Economics Papers: this item is included in nep-eff
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