Exports, Returns to Scale, and Total Factor Productivity: The Case of Taiwanese Manufacturing Industries

• Published in: Review of development economics Vol. 7; no. 2; pp. 204 - 216
• Main Author: Hwang, Amy R.
• Format: Journal Article
• Language: English
• Published: Oxford, UK and Boston, USA Blackwell Publishing Ltd 01.05.2003
• ISSN: 1363-6669; 1467-9361
• DOI: 10.1111/1467-9361.00186

The paper examines the relevance of international scale economies and international market efficiency of trade based on the firm‐level data of Taiwanese manufacturing industries. The author first constructs a simple analytical framework to measure the extent of scale economies and total factor productivity for each firm. The measurements of scale economies and total factor productivity are then used to investigate the relationships among exports, scale economies, and productivity. Significant external scale economies associated with exports and a strong positive relationship between the individual firm's productivity and its own export intensity are observed.