Estimating returns to scale with large imperfect panels

James Tybout and M. Daniel Westbrook

No 754, Policy Research Working Paper Series from The World Bank

Abstract: In this paper, the authors provide systematic panel-based econometric estimates of plant-level returns to scale for various 3-digit and 4-digit manufacturing industries, using panel data for Chilean plants. The paper attempts to answer two questions: 1) Do policies that promote"bigness"in manufacturing plants also promote greater productivity?; and 2) As plants grow, do they become more efficient? The paper is organized as follows. First, the author's assumptions regarding technology and behavior are presented. The following section discusses alternative estimators that deal with different aspects of the econometric problems they faced. Finally, applications of the alternative estimators to various 3-digit and 4-digit industries are reported and an attempt is made to determine which returns to scale estimates are the most reliable.

Keywords: Scientific Research&Science Parks; Science Education; Environmental Economics&Policies; Economic Theory&Research; Statistical&Mathematical Sciences (search for similar items in EconPapers)
Date: 1991-08-31
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Citations: View citations in EconPapers (1)

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