Economies Of Scale Effects Research Articles

Positive spatial and temporal density‐dependence drive early reproductive economy‐of‐scale effects of masting in a European old‐growth forest community

Abstract Masting, the spatial synchronization of interannual variation in seed production, can enhance reproductive efficiency through positive density‐dependent processes (DD) that result in economies of scale (EOS), such as decreased pollen limitation and predator satiation in years of high reproduction. While the general occurrence of such EOS effects has been documented for masting species, few studies simultaneously investigated how spatial and temporal variation in reproduction affects pollination and predation. Furthermore, it is unclear whether the same mechanisms apply to co‐occurring species with different levels of conspecific density, pollen limitation, and seed defences. Here, we use a long‐term dataset with high spatial resolution of seed production of European beech (Fagus sylvatica), Norway spruce (Picea abies), and silver fir (Abies alba) in a primeval montane forest to investigate the relationship between reproductive effort, pollination efficiency and predispersal predation by insects. We found that, along the temporal axis, the proportion of sound (fertilized and unpredated) seeds correlated positively with annual seed production over the 14‐year study period in all three species, most strongly in beech and only weakly in silver fir. Moreover, the results show that in beech, spatial seed density interacts with plot‐wide annual seed rain to enhance DD effects on seed predation, suggesting additive effects of synchronous reproduction on fitness benefits. Synthesis: For both pollination and predispersal predation in beech and spruce, the strongest DD effects occur at low levels of reproduction and quickly reach asymptotes at higher levels, suggesting the presence of thresholds in different EOS mechanisms. As variability and synchrony in mast‐seeding are expected to decline with climate change, EOS effects driven by DD may remain stable until the threshold is reached, at which sudden declines would result in devastating effects on the availability of viable seeds for germination and recruitment.

Accelerated depreciation tax policy and multiple-product firms’ export behaviour: evidence from China

ABSTRACT Using the 2014 accelerated depreciation tax policy (ADP) in China as a quasi-natural experiment, this study examines ADP’s impact on multiple-product firms’ export behaviour. Using data on Chinese A-share listed multiple-product companies from 2011 to 2016, we find that ADP enhances export product quality and reduces the unit price of export products by increasing enterprise innovation, accelerating ‘machine replacing labours’, and realizing the ‘economies of scale effect’. Notably, these effects are pronounced in cost-based competence firm. These findings provide developing countries with insights into the use of ADP to encourage high-quality export development.

Agricultural carbon emission efficiency and agricultural practices: Implications for balancing carbon emissions reduction and agricultural productivity increment

The current Ukraine War underlines the importance of grain self-sufficiency. After the adoption of the Paris Agreement, two major challenges developing countries are facing in the coming decades are increasing agricultural production to ensure food security and reducing carbon emissions (CE). The key to such an “environment-development dilemma” is to improve agricultural carbon emission efficiency (CEE). Using China as the study site, we systematically analyze the impacts of agricultural management activities on agricultural CEE from 1997 to 2019. Global and local Moran's I index tests provide evidence of a positive spatial dependence of agricultural CEE. Using the LISA cluster map, we observe that high CEE regions tend to be distributed together, dominated by environmental conditions. However, with the promotion of agricultural management activities, such a clustering pattern vanished. Our spatial Durbin model (SDM) estimation results indicate that there are significant nonlinear relationships between agricultural practices and agricultural CEE. While the consumption of fertilizers and pesticides has economies of scale effects, the deployment of agricultural machinery and irrigation have diseconomies of scale effects on local CEE. Based on the SDM results, the direct and indirect effect estimation results suggest that the significant direct and spillover effects of many practices on agricultural CEE have opposite nonlinear shapes, implying a more complicated situation in promoting these activities, as the positive regional effect of an agricultural activity might have a negative impact on adjacent regions. All the results indicate that local policymakers should carefully tailor agricultural development policies based on local environmental conditions.

To switch or not to switch? The effect of audit firms’ economies of scale on audit firm switches after audit price deregulation in China

We exploit the unique setting of China’s 2014 audit price deregulation policy to examine whether audit firms use their economies of scale (EOS) to compete for clients. We find a significant increase in client firms switching from a non-EOS auditor to an EOS auditor after the audit price deregulation policy was implemented. The additional analyses show that EOS audit firms are more likely to offer audit fee discounts than non-EOS audit firms while retaining audit quality. We also find that the auditors’ EOS effect is more pronounced for highly homogeneous industries and firms paying high abnormal audit fees, firms in financial distress, and firms receiving less capital market attention than for less homogeneous industries and firms paying low abnormal audit fees, financially stable firms, and firms receiving more capital market attention. Finally, we find that the presence of state-owned enterprises and political connections both separately and jointly moderate the effect of audit firm–client realignments from a non-EOS auditor to an EOS auditor after the audit price deregulation. Overall, our study provides important insights for policymakers and regulators reviewing and developing new policies on audit services.

Dynamic comparison on the technical efficiency between China's EPEs and PEs: Two-dimensional measurement based on SFA

It is of equal importance to improve the efficiency of environmental protection enterprises (EPEs) and polluting enterprises (PEs) for Environmental Protection and Green Development, which is a micro-foundation for China's economic transformation and high-quality development. This paper redefines the efficient frontier of enterprises, distinguishing between “absolute technical efficiency” (ATE) and “relative technical efficiency” (RTE), and conducts two-dimensional measurements and dynamic comparison to examine the technical efficiency characteristics of China's EPEs and PEs listed on the A-share market, based on the stochastic frontier analysis (SFA) method. The results demonstrate that, first, the ATE of EPEs exhibits a reverse upward trend, while the ATE of PEs and A-share enterprises as a whole is declining simultaneously. Second, in contrast to the shrinkage of the ATE and RTE of PEs, the efficient frontier of EPEs has experienced rapid expansion. Third, capital utilization efficiency, rather than economies of scale effects, appears to be the main obstacle impeding the technical efficiency performance of EPEs. Therefore, improving the capital utilization efficiency and the extent of coupling and coordination between capital and labor is the key to promoting the technical efficiency of EPEs. Fourth, targeted government subsidies and tax refunds for EPEs need to be improved and an external evaluation mechanism focusing on Environment, Social and Governance (ESG) rating needs to be strengthened. Consequently, it is essential to promote the combination of top-down targeted policy support and multi-dimensional external evaluation to guide capital flows and achieve their efficient utilization, which is also the basis of the environmental protection industry's high-quality development.

Market integration and green economic growth-recent evidence of China's city-level data from 2004-2018.

Very few studies exist in rationalizing comprehensively the relationship between market integration and green economic growth in China. This paper tries to answer the question whether and how market integration influences regional green economic growth in China. Based on the panel data of 285 city-level regions from year 2004 to 2018 in China, this paper develops explanatory mechanism and discusses the influence theoretically and empirically. To advance the analysis, we construct market integration indicator through relative price variance method based on commodity retail price index and employ the Malmquist–Luenberger (ML) productivity index and DEA-SBM (data envelopment analysis–slacks-based measure) model to evaluate green total factor productivity (GTFP) as indicator for green economic growth. Our empirical findings are: (1) Apparent regional imbalance exists in both the development of market integration and green growth and gaps are expanding from year 2004 to 2018. (2) Market integration promotes regional green growth significantly. (3) Mechanism analysis illustrates that market integration fosters green growth through economies of scale effect, composition effect and spillover effect, respectively. (4) Heterogeneous analysis suggests that the influence from market integration on green growth varies depending on region’s difference in traffic situation and in overall development level.

Sustainable manufacturing of polymeric materials: A techno-economic analysis of soybean oil-based acrylic monomers production

(Acryloylamino)ethyl soyate is a soybean oil-based acrylic monomer (SBM) with versatile properties for applications in polymeric materials. To explore the economic feasibility of the bio-based monomers as a potential replacement for the commercial petro-counterpart, this study presents a conceptual process design and scale-up of SBMs production. Process simulation was conducted by Aspen Plus through an integrated design consisting of the catalytic transesterification conversion of soybean oil/soybean oil-based biodiesel with N-hydroxyethyl acrylamide (HEAA), followed by product recovery optimization with solvents recycling solutions. The simulation tool estimated mass and energy balances and assessed plant performance under varying process conditions (different renewable content, catalysts, soybean oil-based feedstocks, and scales). The minimum selling price (MSP) of SBM in the base case was estimated to be $78.4/kg using a cash flow analysis, which shows its economic potential compared to stearyl acrylate. The renewable content of the specialty chemical is a key technical parameter for MSP while it contributes to carbon emission reduction as well. Carbon abatement cost analysis indicates trivial economic impact of feedstock and the need for abatement consideration in different environmental profiles for bio-based chemicals. The uncertainty analysis showed the price of the fossil-based component – HEAA has the major impact on the MSP, while feedstock to HEAA ratio, tax rate, interest rate, and capital cost are sensitive parameters. Underlying areas such as wastewater treatment and economy of scale effects in producing specialty polymers were also discussed in this study.

Managing the increasing returns of a high-tech business model in industry: Classic and ecosystem effects

Business model management is possible on the basis of detailing and clarifying methods for calculating forms of increasing returns. High-tech companies, in contrast to traditional ones, have additional rents associated with the dual use of technologies and digitalization. The article develops a set of methods for assessing the cumulative increasing returns of a hightech business model based on the calculation of classic and ecosystem effects. The neoclassical economic theory, the network (relational) approach, the concepts of business models and ecosystems constitute the methodological basis of the study. The authors differentiate between five forms of returns: economies of scale effects, effects of innovation, diversity, direct and indirect network-based (ecosystem) effects. The research method is pioneered by the authors and based on a sequential assessment of the five forms of returns. For each form, an optimal calculation method is proposed, the results of which are unified by the standardization method. The level of increasing returns is empirically calculated using the case study of the civil production of the Semikhatov Scientific and Production Association (SPA) of Automatics – one of the largest high-tech industrial enterprises. The paper highlights the problems in measuring returns, such as the lack of panel data on the enterprise, a uniform method and relevant examples for calculation, as well as objective data on sectoral markets. The research results prove that the key management objective is to enhance the positive difference between increasing and decreasing returns through transformation of the business model. To achieve this objective, we compile a matrix of effects, the level of which allows making appropriate management decisions. Our calculations show that the enterprise experiences decreasing returns from adoption of innovation. The level of increasing returns from the learning effect and the direct network-based effect is quite low, which indicates that the enterprise’s business model is traditional, rather than technological. The research results can serve as a basis for the development of a detailed management mechanism for transforming a business model. The method for increasing returns assessment is universal and can be applied to evaluate the effectiveness of any business models.

Factors influencing the environmental and economic feasibility of district heating systems\u2014a perspective from integrated spatial and energy planning

BackgroundDistrict heating systems have been gaining importance in the last years. However, local circumstances, e.g. regarding heat demand and available heat sources, are diverse and new technologies especially in the low-temperature sector arise. Central aim of this research is to identify the impact of integrated spatial and energy planning on the environmental and economic sustainability of district heating systems, to distinguish between more and less appropriate areas for district heating and to build the basis for a low-barrier decision tool for local authorities regarding the identification of areas suitable for district heating, also showing spatial planning strategies to enhance the opportunities for district heating. Future changes until 2050 are analysed and planning principles derived; therefore, unpredictable parameters such as energy prices and subsidies are not included in this research.MethodsBased on the system analysis according to Vester, a modified method was developed. The following research fields were involved: spatial planning, resource management, environmental planning, and energy and building technology.ResultsAs main integrated spatial and energy planning aspects relevant for district heating, mix of functions, potential of compacting and extension, density of buildings, inhabitants and employees, building type, thermal insulation potential, and the used heat source(s) were identified. By steering these parameters, the feasibility of district heating systems can be enhanced. Indicators, directly linked to the feasibility of district heating systems are energy consumption density, number of annual full load hours, temperature level, and available heat source(s). Climate change, changes in building density, thermal insulation, and the mix of functions will influence district heating systems regarding environmental and economic aspects. Reduced heat consumption can be a threat to district heating systems, but can be balanced by decreasing inlet temperatures, making waste heat and renewables accessible.ConclusionsAs district heating systems are often advantageous to other forms of providing heat due to higher resilience, the economies of scale effect, or the potential of using energy surpluses (‘waste heat’), spatial planning policies must seek ways to provide for adequate building density and to enhance the mix of functions in order to ensure the long-term feasibility of district heating systems.

Resource efficiency or economy of scale: Biorefinery supply chain configurations for co-gasification of black liquor and pyrolysis liquids

Biorefineries for the production of fuels, chemicals, or materials can be an important contributor to reducing dependence on fossil fuels. The economic performance of the biorefinery supply chain can be increased by, for example, industrial integration to utilise excess heat and products, increasing size to improve economy of scale, and using intermediate upgrading to reduce feedstock transport cost. To enable a large-scale introduction of biorefineries it is important to identify cost efficient supply chain configurations.This work investigates a lignocellulosic biorefinery concept integrated with forest industry, focusing on how different economic conditions affect the preferred supply chain configurations. The technology investigated is black liquor gasification, with and without the addition of pyrolysis liquids to increase production capacity. Primarily, it analyses trade-offs between high biomass conversion efficiency and economy of scale effects, as well as the selection of centralised vs. decentralised supply chain configurations.The results show the economic advantage for biomass efficient configurations, when the biorefinery investment is benefited from an alternative investment credit due to the replacement of current capital-intensive equipment at the host industry. However, the investment credit received heavily influenced the cost of the biorefinery and clearly illustrates the benefit for industrial integration to reduce the cost of biorefineries. There is a benefit for a decentralised supply chain configuration under very high biomass competition. However, for lower biomass competition, site-specific conditions will impact the favourability of either centralised or decentralised supply chain configurations.

The evolution of regional multi-pole growth

Regional multi-pole growth is an important spatial form of regional economic organization pattern. We construct a model of regional multi-pole growth evolution to study its mechanism based on the assumption of heterogeneous space and inseparability of the economic subject. The study concludes that the evolution of regional multi-pole growth is affected by factors such as transportation costs, economies of scale, the crowding-out effect, and the factor endowments of superior location and inferior location. Based on the condition that the factor endowment of a location remains the same, with an increased economy of scale effect and a decline in the marginal production cost advantage, location will strengthen the agglomeration layout, which does not help form regional multi-pole growth patterns. With an increase of the crowding-out effect and a decline in the marginal production cost disadvantage, location will strengthen the dispersed layout, which fosters the formation of the regional multi-pole growth pattern. When transportation costs are high, a decline in such costs strengthens the links among locations, fostering the evolution of the regional spatial organization form to shift from dispersion to agglomeration. However, when transportation costs are somewhat reduced, their further reduction leads the regional spatial organization pattern into dispersion. Therefore, under certain conditions and with a decline in transportation costs, regional multi-pole growth weakens first and then strengthens.

A Supplier Switching Model With the Competitive Reactions and Economies of Scale Effects

To minimize costs, a buying firm would seek sources which offer a more affordable price for the required products. On the basis of a principal-agent framework, this paper presents a buyer’s supplier switching model under asymmetric information to minimize the buying cost considering the volume-dependent switching cost, the competitive reactions and economies of scale effects of the incumbent supplier. The proposed model is first converted into an optimal control problem. Then the optimal supplier switching strategy and the corresponding transfer payment are obtained by virtue of Pontryagin’s maximum principle. It is shown that the switching cost components and competitive reactions have significant impacts on the switching decision. Only if the maximum price discount is greater than the fixed component of the switching cost, there may exist a partial switching strategy for the buyer to benefit from the competitive effects. Otherwise, the buyer should take an all-or-nothing switching strategy or no switching strategy. Some managerial implications for sourcing strategies with respect to the competitive reactions and economies of scale effects are provided. Furthermore, we propose a revenue sharing contract to highlight the advantage of the contract designed based on the principle-agent theory. Finally, we employ numerical examples to account for the proposed methods.

Integrated thermoeconomic optimization of standard and regenerative ORC for different heat source types and capacities

An integrated thermoeconomic optimization approach of standard and regenerative Organic Rankine Cycles (ORC) is presented. The impact of different heat source temperatures and capacities is investigated. Different expander types and configurations are selected based on technical operation limits. Four working fluids are examined, in accordance with the latest European Union F-gas regulations. The optimization variables are the evaporating pressure, condensation temperature, pinch point in the heater and cooler and recuperator effectiveness. Cyclopentane was found to be the optimal fluid for small scale applications, while for larger ones propane and R1234ze exhibit the best performance. The expander selection, mainly affected by the operating pressure and condensation temperature, plays a predominant role on the economic performance of ORCs. The pinch point in the heater is also an important variable, while the pinch point in the cooler is comparatively insignificant. The recuperative ORC was found to be appealing for high temperature, closed loop (CL) systems and unfavorable for open loop (OL) ones. An economy of scale effect was observed for small system capacities, becoming decreasingly significant for larger scales. The specific investment cost is highly variable, ranging from 15,067 €/kWe (R1234ze, Ths = 100 °C, 1.41 kWe) to 770 €/kWe (propane, Ths = 300 °C, 110.58 kWe).

Industrielles statt gewerbliches Denken ist gefordert (Essay)

Industrial thinking has to replace craftsmanship thinking (essay) By the beginning of the 1980s, the Swiss forestry sector lost its financial viability. Although operational forestry activities have been subsidized, the overall situation even worsened con sid erably since then. This poses the question whether there are ways out of this situation and if there are, which ones. The present contribution takes up the hypothesis that the Swiss forestry sector is still mainly based on craftsmanship thinking while successful forestry sectors of other countries have been following industrial thinking. The analysis results in the following theses: The difficulties of economic efficiency emerged in the 1960s, and sector-wide initiatives were launched to solve the problem, among which the 1975 master plan for a Swiss forest sector policy was of special importance. Industrial thinking is based on the following principles: 1) a systematic capitalization of economies of scale effects, 2) an integration of all production and distribution processes across owners and firms, 3) full mechanization of wood harvesting, and 4) rationalization of the biological production based on modern tree breeding methods. The intention of the present article is to contribute to a discussion which discards outworn patterns of thought, and which is honestly looking for viable, competitive solutions.

Estimation of CO2 Transport Costs in South Korea Using a Techno-Economic Model

In this study, a techno–economic model was used to calculate the costs of CO2 transport and specify the major equipment required for transport in order to demonstrate and implement CO2 sequestration in the offshore sediments of South Korea. First, three different carbon capture and storage demonstration scenarios were set up involving the use of three CO2 capture plants and one offshore storage site. Each transport scenario considered both the pipeline transport and ship transport options. The temperature and pressure conditions of CO2 in each transport stage were determined from engineering and economic viewpoints, and the corresponding specifications and equipment costs were calculated. The transport costs for a 1 MtCO2/year transport rate were estimated to be US$33/tCO2 and US$28/tCO2 for a pipeline transport of ~530 km and ship transport of ~724 km, respectively. Through the economies of scale effect, the pipeline and ship transport costs for a transport rate of 3 MtCO2/year were reduced to approximately US$21/tCO2 and US$23/tCO2, respectively. A CO2 hub terminal did not significantly reduce the cost because of the short distance from the hub to the storage site and the small number of captured sources.

Discussion on the Synergy Mechanism of Diversified Coal Enterprises

Taking the example of aCoal & Chemistry Industry Group and aiming at the problems like unclearindustry synergy motivation, path and target of China’s Diversified large coalenterprise groups, a case study is used to analyze the synergy mechanism of itsdiversified industries through the research procedure of open coding, selectivecoding, axial coding, the test of the theory saturation. The study shows theassociation between the main and expanded coal enterprises business, containingthree forms of association, which are business association, functionassociation and political association respectively. Besides, with the help ofthe internal market, circular utilization, transaction cost reduction,resources sharing, merge and reorganization, scarce resources acquisition andother measures to achieve these effects, for example risk diversification,economy of scope effects, economy of scale effects and market promotion effect,etc.

Feasibility, Stability, and Multiple Research Joint Ventures

We study multiple research joint ventures (RJVs) using a repeated game with imperfect monitoring. Compared with the single joint venture case, we show that cooperation in multiple joint ventures creates two advantages for participating firms. First, by linking decisions together across all joint ventures firms can mitigate the likelihood of cooperation breakdowns following bad R&D outcomes. Second, as the incentive cost to sustain cooperation is independent of the number of joint ventures, the economy of scale effect reduces the efficiency loss due to imperfect monitoring.

A multi‐objective approach to the parcel express service delivery problem

ABSTRACTParcel express service in many countries assumes door‐to‐door delivery of parcels and small packages in the fastest possible way. Delivery companies usually organize hub delivery networks, as flows between hubs are characterized by the economy of scale effect. At hubs, parcels are exchanged across vans, trucks, and planes. To organize parcel delivery in a specific region, the parcel delivery company must make appropriate decisions about the total number of parcel delivery hubs, their locations, and the allocation of demand for facilities' services to facilities. These issues are modeled in this paper as a multi‐objective problem. The model developed is based on compromise programming and genetic algorithms. We also demonstrate in the paper an interactive manner in which a defined problem can be solved. The proposed model could be implemented in large‐scale networks. The paper also shows a case study of parcel delivery service in Serbia. Copyright © 2013 John Wiley & Sons, Ltd.

Cost effectiveness of commercial computing clouds

This paper presents the procedure for comparing costs of leasing IT resources in a commercial computing cloud against those incurred in using on-premise resources. The procedure starts with calculating the number of computers as depending on parameters that describe application's features and execution conditions. By measuring required execution time for different parameter values, we determined that this dependence is a second-order polynomial. Polynomial coefficients were calculated by processing the results of fractional factorial design. On that basis we calculated costs of computing and storage resources required for the application to run. The same calculation model can be applied to both a personal user and a cloud provider. The results will differ because of different hardware exploitation levels and the economy of scale effects. Such calculation enables cloud providers to determine marginal costs in their services' price, and allows users to calculate costs they would incur by executing the same application using their own resources.Leasing in cloud establishes a business relationship: buyer wants to reduce costs, and cloud provider wants to generate profit. This relationship will be realized if the buyer and the provider agree on a mutually acceptable fair price that can be determined by the symmetric mediation plan.All the steps in this procedure are integrated into CCCE method and represented as a process model.

Waste management under multiple complexities: Inexact piecewise-linearization-based fuzzy flexible programming

To tackle nonlinear economies-of-scale (EOS) effects in interval-parameter constraints for a representative waste management problem, an inexact piecewise-linearization-based fuzzy flexible programming (IPFP) model is developed. In IPFP, interval parameters for waste amounts and transportation/operation costs can be quantified; aspiration levels for net system costs, as well as tolerance intervals for both capacities of waste treatment facilities and waste generation rates can be reflected; and the nonlinear EOS effects transformed from objective function to constraints can be approximated. An interactive algorithm is proposed for solving the IPFP model, which in nature is an interval-parameter mixed-integer quadratically constrained programming model. To demonstrate the IPFP’s advantages, two alternative models are developed to compare their performances. One is a conventional linear-regression-based inexact fuzzy programming model (IPFP2) and the other is an IPFP model with all right-hand-sides of fussy constraints being the corresponding interval numbers (IPFP3). The comparison results between IPFP and IPFP2 indicate that the optimized waste amounts would have the similar patterns in both models. However, when dealing with EOS effects in constraints, the IPFP2 may underestimate the net system costs while the IPFP can estimate the costs more accurately. The comparison results between IPFP and IPFP3 indicate that their solutions would be significantly different. The decreased system uncertainties in IPFP’s solutions demonstrate its effectiveness for providing more satisfactory interval solutions than IPFP3. Following its first application to waste management, the IPFP can be potentially applied to other environmental problems under multiple complexities.