Empirical Economics

, Volume 18, Issue 3, pp 469–480 | Cite as

Scale economies in manufacturing: Problems of robust estimation

  • Jati K. Sengupta
  • Kumiko Okamura


The purpose of the paper is to develop a cost frontier model and its robust estimation for analyzing the impact of scale economies in the manufacturing sector. Indirectly our estimates provide a test of the new growth theory which emphasizes the role of increasing returns to scale as a major force in the sustained growth process. An illustrative application to the South Korean manufacturing sector finds strong supportive evidence for significant scale economies, though in recent years it may be declining for the Korean economy.

JEL Classification System-Numbers

C5 C53 


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Copyright information

© Physica-Verlag 1993

Authors and Affiliations

  • Jati K. Sengupta
    • 1
  • Kumiko Okamura
    • 1
  1. 1.Department of EconomicsUniversity of California at Santa BarbaraUSA

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