publication . Article . 1999

Scale Economies and Industry Agglomeration Externalities: A Dynamic Cost Function Approach

Donald S. Siegel; Catherine J. Morrison Paul;
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  • Published: 01 Jan 1999 Journal: American Economic Review, volume 89, pages 272-290 (issn: 0002-8282, Copyright policy)
  • Publisher: American Economic Association
Abstract
Scale economies and agglomeration externalities are alleged to be important determinants of economic growth. To assess these effects, the authors outline and estimate a microfoundations model based on a dynamic cost function specification. This model provides for the separate identification of the impacts of externalities and cyclical utilization on short- and long-run scale economies and input substitution patterns. The authors find that scale economies are prevalent in U.S manufacturing; cost savings and scale effects often attributed to internal inputs may be due to external factors; and supply-side agglomeration effects are greater than demand-side, especial...
Subjects
free text keywords: Economics and Econometrics, Economies of agglomeration, Externality, Economies of scale, Economics, Microfoundations, Macroeconomics, Microeconomics, Aggregate productivity, jel:O47, jel:E23
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publication . Article . 1999

Scale Economies and Industry Agglomeration Externalities: A Dynamic Cost Function Approach

Donald S. Siegel; Catherine J. Morrison Paul;