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Scale Economies in Small Entrepreneurial Firms

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  • Reid, Gavin C

Abstract

For a sample of small, entrepreneurial firms, subjective cost curve estimates are obtained by field work methods using an administered questionnaire and "show cards." They indicate the prevalence of static, short-run increasing returns up to maximal output for a wide range of products in manufactures, services, construction, and transport. The dynamic scale effect, measured over a three-year period, is less clear and suggests a slight average tendency to dynamic increasing returns. Finally, cross-section econometric estimates of production functions, with no restriction imposed on the degree of homogeneity, suggest a long-run tendency to decreasing returns. Copyright 1992 by Scottish Economic Society.

Suggested Citation

  • Reid, Gavin C, 1992. "Scale Economies in Small Entrepreneurial Firms," Scottish Journal of Political Economy, Scottish Economic Society, vol. 39(1), pages 39-51, February.
    • Handle: RePEc:bla:scotjp:v:39:y:1992:i:1:p:39-51
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