Economies of scale, production and exports in the UK and USA
The main purpose of our research is to examine the role
of economies of scale in influencing the United Kingdom
domestic production and its exports and imports.
Chapter One discusses the role of economies of scale
in the theory of-international trade. Chapter Two discusses
the various methods of measuring economies of scale,
classified according to different types of cost-curves.
In Chapter Three I estimate the minimum efficient firm
size in U. K. industries, and also "point elasticities" for
scale-economy cost-curves for 1963 and 1972. The scale
elasticities were estimated at firm and plant levels.
Chapter Four uses the point elasticity estimates to
analyse the U. S. /U. K. relative exports and imports. In
addition I also consider two other explanatory variables,
namely skill intensities and import tariffs. The tests
were carried out for 1963 and 1972 for three different
markets, namely the World, OECD, and non-OECD. In general
the independent variables performed well and showed the
Chapter Five examines whether the average size of
plants and capital intensity in British and American
industries have a significant effect on productivity within
the plants. The test makes use of a weighted average
size of plants and weighted average productivity. The
tests were undertaken separately at the level of the entire
industry and for each of two groups, namely the large and
small plants. The regression results were significant for
tests on both small and large sized level plants. The
co-variance technique was used to see whether the
relationship between the variables differs.
Chapter Six states the implications, that large firms
in the U. K. operate at a disadvantage as diseconomies
of scale, such as strike activities, bad labour relations
and inadequate managerial control, outweigh the advantages
which arise from producing on a large scale. Also, the
United Kingdom has a disadvantage in skill requirements,
more training courses are needed to increase the number
of workers with vocational qualifications.