Abstract
The paper is based on Chinese industrial enterprises database, applying the method of translog cost function to measure the economies of scale in manufacturing during the period between 2000 to 2013. The result shows that the mean of scale economies (SCE) is between 0.993 and 0.996, which indicates slight diseconomies of scale. From the perspective of the SCE variation trend, before 2010, there was a decreasing trend year by year, and the variation remained stable after 2010. Considering manufacturing heterogeneity, the paper divides manufacturing into nine groups to measure economies of scale. The group measurement results show that mining industry and light industry have high economies of scale, but in a decreasing state, other sub-sectors show slight diseconomies of scale and in a stable state.
Highlights
Economies of scale is the key indicator to measure the long-term cost of enterprises, and it is one of the important determinants of the long-term sustainable development of the manufacturing industry, especially the large-scale manufacturing enterprises with mature technological conditions
The results show that 82.49% of the enterprises in the mining industry, 54.99% of the enterprises in light industry, and 20.46% of the enterprises in the intermediate products industry had realized economies of scale
The thesis adopts the method of translog cost function, using the panel data of Chinese industrial enterprises database from 2000 to 2013, measuring the economies of scale of the Chinese entire manufacturing industry and its sub-sectors
Summary
Economies of scale is the key indicator to measure the long-term cost of enterprises, and it is one of the important determinants of the long-term sustainable development of the manufacturing industry, especially the large-scale manufacturing enterprises with mature technological conditions. Since China's reform and opening up, the continuous development of manufacturing has become the key of boosting the economy. After entering the 21st century, with the gradual disappearance of the demographic dividend and the stricter of environmental constraints, the development of manufacturing is facing severe challenges. It is important to re-evaluate the economies of scale of the manufacturing industry. It is of great significance to determine the competitive position of various manufacturing sectors and promote the transformation and upgrading of the manufacturing industry
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