Economies of Scale and Increasing Returns: An Application to Mexican Microenterprises

Natanael Ramírez Angulo (), Alejandro Mungaray Lagarda (), Martin Ramirez-Urquidy () and Michelle Texis Flores ()
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Natanael Ramírez Angulo: Profesor-investigador, Facultad de Economía y Relaciones Internacionales, Universidad Autónoma de Baja California (uabc). Tijuana, B.C. México.
Alejandro Mungaray Lagarda: Profesor-investigador, Facultad de Economía y Relaciones Internacionales, Universidad Autónoma de Baja California (uabc). Tijuana, B.C. México.
Michelle Texis Flores: Profesora-investigadora, Facultad de Economía y Relaciones Internacionales, Universidad Autónoma de Baja California (uabc). Tijuana, B.C. México.

Economía Mexicana NUEVA ÉPOCA, 2010, vol. XIX, issue 2, 213-230

Abstract: The paper discusses the conditions for microenterprises to remain in the market. The analysis demonstrates that microenterprises facing tight constraints may remain in the market only if they are capable of achieving increasing returns and economies of scale that shift down their average cost curves towards more competitive levels. This finding is supported by the analysis of a sample of 95 Mexican microenterprises, and by the estimation of a production optimization model.

Keywords: microenterprises; costs; increasing returns and economies of scale. (search for similar items in EconPapers)
JEL-codes: D21 D24 Y (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:emc:ecomex:v:19:y:2010:i:2:p:213-230

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