Scale economies in the Korean airline industry since the entry of low-cost carriers

Sang-Lyul Ryu and Jayoun Won

International Journal of Economic Policy in Emerging Economies, 2019, vol. 12, issue 2, 149-157

Abstract: This paper investigates how the economies of scale in the Korean airline industry have changed since the emergence of low-cost carriers (LCCs). Our sample consists of 66 firm-years from 2008 to 2017. We estimate the translog cost function (TCF) to determine the changes in scale economies during the sample period. The TCF represented airlines' cost function more appropriately than the Cobb-Douglas model. The estimated cost function suggests that overall economies of scale have prevailed in the Korean airline industry since the entry of LCCs. Depending on the type of airline business, scale economies seem to be exhausted for full-service carriers, whereas LCCs have enjoyed economies of scale.

Keywords: airline industry; full-service carriers; low-cost carriers; LCCs; economies of scale. (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=99696 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijepee:v:12:y:2019:i:2:p:149-157

Access Statistics for this article

More articles in International Journal of Economic Policy in Emerging Economies from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().