Internal Returns Research Articles

Return to Schooling in Senegal (La Rentabilite de l'Investissement dans l'Education au Senegal)

Since the 60's, the return to schooling gave rise to growing interest from decision makers to help them prioritise public spending. However, most of the research on the topic deal with internal returns to schooling. This study attempts to measure external returns to investment made by households on education (private return) and by authorities (social return). It is well known that Senegalese households and government devote a lot of resources to education without knowing precisely the returns they get to this investment. This study aims to fill this gap. We use the method of internal returns applied to Enquete Senegalaise Aupres des Menages (ESAM) for 1995. The gross incomes used are also those of 1995. The results show that in Senegal, education exhibit high returns to investment with private returns being higher than the social returns. Furthermore, the analysis by sector shows that social investment for secondary and higher education is not cost-effective as opposite to primary and intermediate levels. Finally, unemployment and failure have a negative impact on social and private returns to schooling.

Returns to scale and externalities in the consumption and investment sectors

Using data on US manufacturing, I estimate internal returns to scale and external effects for the consumption and investment sectors. I construct panels of data at the industry level and use results of gross output production function estimation to derive implied estimates in a value added specification. For the investment sector, returns to scale appear to be slightly increasing, with evidence of a positive external effect. For consumption, the evidence indicates decreasing to constant returns to scale. I discuss the implications of these results for the empirical plausibility of indeterminacy in recent multi-sector models of the business cycle.

How persistent is industry specialisation over time in industrialised countries?

I use the 1994 OECD Structural Analysis database, which provides statistics on output for 33 manufacturing industries in 14 OECD countries over the period 1970 to 1993. I find that in 1970, these countries tended to specialise manufacturing production in very different industries and that most countries retained their specialisation between 1970 and 1993. I conclude that the general stability in industries of specialisation over time lends support to the increasing internal returns to scale models and tends to contradict the standard factor-price equalisation models. The results of this paper also suggest that increasing internal returns to scale and learning-by-doing may serve as a complement to patent protection and other forms of intellectual property rights.

Return to scale and external economies: empirical evidence from Greek two-digit manufacturing industries

This paper applies the methodology developed by Caballero and Lyons (1989), in order to estimate jointly the degree of internal returns to scale and the extent of external economies in Greek two-digit manufacturing industries during the period 1963–90. Overall, we find that only two industries show evidence of internal increasing returns: food products, and transport equipment. On the other hand, we cannot reject the presence of external economies. According to our estimates if an industry increases its inputs in isolation by 10% its output rises by 6%. However, if all industries act in concern its output rises by 10%, implying social constant returns to scale.

Returns to Scale in Canadian Manufacturing: An Interprovincial Comparison

This paper measures the degree of returns to scale at the two-digit Standard Industrial Classification (SIC) in Canadian manufacturing employing both gross output and value added data. Using a model developed by R. J. Caballero and R. K. Lyons, the study distinguishes between internal and external returns to scale. The Caballero and Lyons model is extended by disaggregation to the provincial level in order to measure the returns to scale of geographic (provincial) concentration. The empirical results suggest that in Canada there are increasing returns that are primarily national rather than internal to the province or the industry.

On the Many Kinds of Growth: A Note

In this note, the authors synthesize exogenous and endogenous sources of economic growth in a stochastic dynamic log linear general equilibrium model. Endogenous growth could be the result of internal constant returns to scale, external increasing returns to scale in the production of human capital or in the production of goods. The authors get a closed form log linear representation for the dynamic laws of motion for the human and physical capital stocks. Using the solution, they distinguish between different sources of growth that combine exogenous technical progress with endogenous sources of growth that jointly can generate many possible patterns of economic growth. Copyright 1996 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Education and agricultural productivity: Evidence from Uganda

Existing evidence on the impact of education on agricultural productivity in Africa is mixed, with estimates usually insignificant although sometimes large. Analysis of the first nationally representative household survey of Uganda gives an estimate of the impact of household primary schooling on crop production comparable to the developing country average. In addition, the primary schooling of neighbouring farm workers appears to raise crop production and these external returns exceed the internal returns. Education complements capital and substitutes for labour. Further productivity increases arise through education increasing physical capital and purchased inputs, but effects via crop choice appear negligible.

On the Welfare Effects of a Customs Union Versus Unilateral Trade Policies Under Internal Scale Economies and Product Homogeneity

Notwithstanding some recent attempts at analyzing the impact of increasing internal returns to scale (IIRS) on CU theory, research on this issue is still at a highly rudimentary stage. The potentially important implications for CU theory of the introduction IIRS were in fact independently discussed in seminal, albeit relatively neglected papers by Max Corden [1972] and Donald Mead [1968]. This paper selectively surveys and applies the earlier papers to systematically establish conditions under which a CU could, from a single country's perspec tive, potentially pareto dominate unilateral trade policies. Relaxation of some restrictive assumptions maintained by Corden [1972] and Mead [1968] allow for the consideration of a wide-ranging and rich milieu of theoretical possibili ties of non-negligible practical significance. (JEL Classification: b02, tl2, tlo)

EXTERNAL ECONOMIES IN TAIWAN'S MANUFACTURING INDUSTRIES

This paper presents estimates of indexes of internal returns to scale and external economies for two‐digit manufacturing industries in Taiwan. Estimating the returns to scale indexes involves using both SUR and 3SLS estimation procedures. The data strongly support the presence of external increasing returns to scale. The findings indicate no evidence of internal increasing return in all two‐digit manufacturing industries. According to the endogenous growth literature, the existence of externalities in production bears important economic implications in some aspects of economic growth, even though the data cannot distinguish the transmission mechanism.

Distinguishing external from internal scale effects: The case of public infrastructure

The recent applied production theory literature focusing on the economic performance of firms has increasingly recognized the importance of scale effects on costs and therefore efficiency. These scale effects may include short run returns due to fixity of privately demanded inputs (i.e., capital, long run internal returns to scale, and external factors affecting costs. Since these different types of scale effects can be thought of as shifts in and movements along cost curves, the different cost effects of such factors can be identified in a framework which explicitly takes them into account in the definition ofscale.

Internal versus external economies in European industry

This paper presents estimates of indexes of internal returns to scale and external economies for two-digit manufacturing industries in the four European countries for which the requisite data are available in adequate length: West Germany, France, the U.K., and Belgium. Overall, we find very little evidence of internal increasing returns to scale: of the thirteen two-digit industries, only Rubber and Plastic Products, Agricultural and Industrial Machinery, and Mineral Products exhibit any significant internal increasing returns to scale, and for none of the three is internal increasing returns present in more than two of the four countries. Evidence of external economies, on the other hand, exists for all four countries, the effects of which are especially strong in France and Belgium.

Agenda for a Commission to Study Financial Markets, Their Structure, and Regulation

Efficiency of resource allocation means that the value of useful output in society cannot be increased by a reallocation of resources to other uses. Under highly specialized conditions, namely the absence of internal and external returns to scale, this quality will be achieved by perfect competition. On the assumption, yet to be validated, that returns to scale are absent, the first-order effects of allocative inefficiency may then be investigated by the presence or absence of price diSerentials in the market. If the same commodity or service is selling (or could be selling) at diSerent prices in the market there is a gain both to private traders and to the economy from eliminating the differentials. A second and more inclusive effect of resource inefficiency is that price differences do not correspond to differences in the social marginal cost of producing goods and services. Economic inefficiency is undesirable because it represents a loss of real output. Furthermore, inefficiency produced by government restriction generates a considerable amount of energy and activity designed to overcome barriers in the market. While such activity may reduce the distortions of output, it does so atacost. An efficient allocation of resources does not imply a desirable distribution of welfare among individuals. The reason is that the allocative mechanism reflects the existing distribution of welfare, so that an unjust distribution can be as efficient as a just. Moreover a just distribution with an inefficient allocation

REARRANGEMENT STUDIES WITH C14: XI. THE FORMOLYSIS OF 2-PHENYLETHYL-1-C14p-TOLUENESULPHONATE WITH OR WITHOUT ADDED SODIUM p-TOLUENESULPHONATE-S35

The formolysis of 0.350 M 2-phenylethyl-1-C14p-toluenesulphonate (I) was carried out at 74 ± 0.2 °C with or without the presence of an equimolar amount of sodium p-toluenesulphonate-S35 (III). The over-all first-order rate constant, k1, was found to be 2.6 × 10−5 sec−1 and 3.0 × 10−5 sec−1, respectively, for the reaction with and without added III. The determination of the degrees of rearrangement of the C14-labeled atoms from the C-1 to the C-2 positions in the 2-phenylethyl p-toluenesulphonate (Ir) recovered from the reaction mixture at various reaction times permitted the evaluation of k14, the rate of return from ionic intermediates to covalent bonding. Using the experimental data, it was possible to calculate ks and kΔ, the rates, respectively, for the anchimerically unassisted and assisted solvolysis. As expected, formolysis of I proceeded principally by the anchimerically assisted process. Calculations also showed that the fraction of the anchimerically assisted ionization returning to covalent bonding was about 15% for the reaction in the presence of III, while in the absence of III, the return was about 9%. For the formolysis of I in the presence of III, the extents of incorporation of S35 in the recovered sulphonate Ir were also determined. The S35 incorporation in Ir, when considered in conjunction with the C14 rearrangement in Ir, led to the conclusion that the return from ionic intermediates to covalent bonding during the formolysis of I included both internal and external returns, the extent of external return being the greater of the two.

Rearrangement studies with 14C—VIII : External and internal returns in the solvolysis of 2-phenyl-1- 14C-ethyl p-toluenesulfonate

Acetolysis and formolysis of 2-phenyl-1- 14C-ethyl p-toluenesulfonate (I) were interrupted when the reactions were about 50 per cent complete. All samples of 2-phenylethyl p-toluenesulfonate recovered from the partially solvolyzed mixtures showed some rearrangements of the 14C-labeled atoms from the C-1 to the C-2 positions, indicating the occurrence of some return to covalent bonding through the intermediate ethylphenonium ion (V) or its equivalent. The fraction of V undergoing return as compared to the amount of V involved in product formation was greater for acetolysis than formolysis. The presence of lithium perchlorate gave rise to salt-promoted ionization resulting in an increase in the 14C rearrangement for the reaction products; however, lithium perchlorate also reduced the relative extent of return involving V. Solvolysis of I in the presence of sodium p-toluene- 35S-sulfonate made possible the simultaneous determinations of 14C rearrangement and 35S exchange in the recovered 2-phenylethyl p-toluenesulfonate. Considerations of such data led to the conclusion that both external and internal returns take place during acetolysis and formolysis of I.