Returns to scale in a highly regulated economy: evidence from Indian firms

摘要: Abstract This paper examines returns to scale for a panel of Indian manufacturing firms from 1976–1985, period in which government regulations restricted firms' expansion. Observers have argued that these led unexploited economies firms, and our estimates lend limited support this view. Although large number produce below the minimum efficient scale, average various industries are not significantly different one. Our suggest recent deregulation will generate significant gains efficiency unless expansion is heavily biased towards growth smaller firms.