Optimal Plant Size and Its Determinants in Manufacturing Industries in Iran

Document Type : Original Article

Authors

1 Assistant Professor, Department of Economics, Business School, Yazd University, Yazd, Iran

2 Department of Economics,Faculty of Economics and Political Science, Shahid Beheshti university

3 Master in Planning of Economic Systems, Shahid Beheshti University

Abstract

The terms Nominal as well as Actual capacity are commonly used to describe the situation of manufacturing industries at country, region or industry levels. However, in the economic literature, optimal plant size is considered as one of the key concepts by which the characteristics of an industry are distinguished from other industries, and unlike the aforementioned capacities, this size cannot be treated as a fixed and given size. In this manner, the optimal plant size is affected by the behavior of active firms in each industry. and both internal and external factors can change it over time. Accordingly, using various methods, several studies have attempted to estimate optimal plant size in industries, sectors and regions and identify its determinants. This article has also tried to determine this size and its determinants in Iranian manufacturing industries at four-digit industry levels. As expected and consistent with previous studies, the results of this study indicate that optimal plant size is strongly influenced by the size of the structure (distribution) of its plants. In addition, the results show that location of firms (in terms of developed and less developed in comparison with undeveloped regions), firm productivity as well as using high and medium technology levels (in comparison with low technology level and resource based technology), investment and concentration ratio have a significant positive impact on the optimal plant size. However, the impact of ownership structure (cooperative and private in comparison with public structure) and the firm's profitability on the optimal plant size is negative and significant. Nevertheless, the impact of industry growth as external factors on the optimal plant size is controversial. Therefore, the optimal plant size in any industry is a dynamic variable that is influenced by several factors. Accordingly and in terms of policy implication a dynamic approach should be considered to determine the optimal plant size.

Keywords

References

ابونوری، اسماعیل و نجمه غلامی (1387)، «برآورد و مقایسة نسبت تمرکز در صنایع ایران با استفاده از الگوی لگ-نرمال»، فصلنامة بررسی‌های اقتصادی، شمارة 1، 134-111.
بخشی، لطفعلی (1382)، «اندازه‌گیری تمرکز در صنعت سیمان»، فصلنامة پژوهش‌های بازرگانی، شمارة 26، 96-75.
بهشتی، محمد باقر، ناصر صنوبر و حسن فرزانه کجاآباد (1388)، «بررسی عوامل مؤثر بر ورود و خروج خالص بنگاه‌ها در بخش صنعت ایران»، فصلنامة پژوهش‌های اقتصادی ایران، سال سیزدهم، شمارة 38، 179-157.
پورپرتوی، میر طاهر، داوود دانش‌جعفری و اسدالله جلال‌آبادی (1388)، «مقایسه تطبیقی انحصار و تمرکز در برخی از صنایع کشور»، پژوهشنامة اقتصادی، سال نهم، شمارة 4، 154-129.
جلال‌آبادی، اسدالله و نجمه غلامی (1386)، «انحصار و تمرکز در صنایع ایران: مطالعه موردی برخی صنایع 1384-1379»، دو فصلنامة جستارهای اقتصادی، سال چهارم، شماره 7، 232-197.
خداداد کاشی، فرهاد (1377)، «ساختار و عملکرد بازار، نظریه و کاربرد آن در بخش صنعت ایران»، تهران، مؤسسه مطالعات و پژوهش‌های بازرگانی، چاپ دوم، 1385.
خداداد کاشی، فرهاد (1379)، «انحصار، رقابت و تمرکز در بازارهای صنعتی ایران (73-1367)»، فصلنامة پژوهش‌های بازرگانی، شماره 15، 116-83.
خداداد کاشی، فرهاد (1386)، «صرفه‌های مقیاس در اقتصاد ایران: مورد بخش صنعت»، تحقیقات اقتصادی، شمارة 80، 18-1.
خداداد کاشی، فرهاد و محمدنبی شهیکی‌تاش (1391)، «ارتباط کارایی با متغرهای ساختاری بر مبنای نگرش SCP در بخش صنعت ایران (رهیافت بوت استرپ در استنباط آماری)»، فصلنامة پژوهش‌های اقتصادی ایران، شمارة 51، 42-21.
عبادی، جعفر و محمدنبی شهیکی‌تاش (1383)، «بررسی درجه رقابت در بازارهای صنعتی ایران»، فصلنامة پژوهش‌های بازرگانی، شماره 31.
عمادزاده، مصطفی، کریم آذربایجانی و غلام‌رضا زمانیان (1380)، «صرفه‌های ناشی از مقیاس: تحلیلی از وضعیت شرکت ذوب آهن اصفهان»، مجله تحقیقات اقتصادی، شمارة 59.
فیض‌پور، محمد علی و سعیده رادمنش (1391)، « توزیع اندازه بنگاه‌‌های صنایع تولیدی و روند تغییرات آن»، فصلنامة پژوهش‌های اقتصادی (رشد و توسعه پایدار)، سال دوازدهم، شمارة چهارم، 163-135.
فیض‌پور، محمد علی و محمد رضا دهقان‌پور (1390)، «ساختار صنعت و بهره‌وری نیروی کار در صنایع تولیدی ایران»، فصلنامة پژوهشنامه اقتصادی، سال یازدهم، شمارة 2، ص 95-71.
کانون عصر توسعه، «کتاب طلایی صنعت و معدن استان یزد سال 1387»، یزد، مؤسسه راهیان پگاه نور.
 
Audretsch, D. B. and Leeuwen, G. V. (1999), "Are Small Firms Really Suboptimal?", Small Business Research and Consultancy, Research Report 9902/E, 1-47.
Bain, J. S. (1956), Barriers to New Competition, Cambridge, Mass: Harvard University Press, Quoted in Clark, 1990.
Berndt, Ernst R., and Dieter M. Hesse (1986), ″Measuring and Assessing Capacity Utilization in the Manufacturing Sectors of Nine OECD Countries″, European Economic Review, 30, 961–989.
Coad, Alex (2009), The Growth of Firms: A Survey of Theories and Empirical Evidence, Evolutionary Economics Group, Max Planck Institute of Economics, Germany, Edward Elgar, Cheltenham, UK • Northampton, MA, USA.
Davies, S. W. (1977), "Minimum Efficient Size and Seller Concentration: An Empirical Problem", Sheffield Division Paper No 77/9.
Duetsch, L. L. (1973), "Elements of Market Structure and the Extent of Suboptimal Capacity", Southern Economic Journal, Vol. 40, No. 2, 216-223.
Eastman, H. C. and Stykolt, S. (1967), The Tariff and Competition in Canada, Toronto: MacMillan of Canada.
Ebadi, J. and Mosavi, S. (2006), "Economics of Scale in Iranian Manufacturing Establishments", Iranian Economic Review, No. 150.
Fuss, M. A. and Gupta, V. K. (1981), "A Cost Function Approach to the Estimation of Minimum Efficient Scale, Returns to Scale, and Suboptimal Capacity", European Economic Review, No. 15, 123-135.
Gabszewicz, J. Jaskold, and M. Quinzii (1986), The Dynamics of Capacity Adjustment in a Competitive Economy, European Economic Review, 30, 729–748.
Gan, J. and Smith, C. T. (2011), "Optimal Plant Size and Feedstock Supply Radius: A Modeling Approach to Minimize Bioenergy Production Costs", Biomass and Bioenergy, Vol. 35, 3350-3359.
Gupta, K. (1979), "Suboptimal Capacity and Its Determinants in Canadian Manufacturing Industries", the Review of Economics and Statistics, Vol. 61, No. 4, 506-512.
Hecker, D. E. (2005), "High- Technology Employment: A NAICS- Based Update", Monthly Labor Review, 57-72.
Klein, L. R. (1960), ″Some Theoretical Issues in the Measurement of Capacity″, Econometrica, 28, 272–286.
Lyons, B. (1980), "A New Measure of Minimum Efficient Plant Size in UK Manufacturing Industry", Economica, New Series, Vol. 47, No. 185, 19-34.
Marsili, O. (2005), "Technology and Size Distribution of Firm: Evidence from Dutch Manufacturing", Review of Industrial Organization Vol. 27, No. 4, 303-328.
Penrose, Edith (2009), The Theory of the Growth ofthe Firm, Fourth Edition, Oxford University Press.
Prince. Y. M. and Thurik. A. R. (1992), "Firm- Size Distribution and Price- Cost Margins in Dutch Manufacturing", Small Business Economics, No. 5, 173-186.
Prince. Y. M. and Thurik. A. R. (1995), "Do Small Firms’ Price- Cost Margins Follow Those of Large Firms?", Bulletin of Economic Research, Vol. 47, No. 4, 0307-3378.
Saving, T. R. (1961), "Estimation of Optimum Size of Plant by the Survivor Technique", Quarterly Journal of Economics, Vol. 75, 569-609.
Segerson, Kathleen, and Dale Squires (1995), ″Measurement of Capacity Utilization for Revenue Maximizing Firms″, Bulletin of Economic Research, 47, 77–84.
Scherer, F. M. and et. al. (1975), The Economics of Multi-Plant Operation, Cambridge: Harvard University Press.
Swamidass, P. and Kotha, S. (1998), "Explaining Manufacturing Technology Use, Firm Size and Performance Using a Multidimensional View of Technology", Journal of Operations Management Vol. 17, No. 1, 23-37.
Walla, C. and Schneeberger, W. (2008), "The Optimal Size for Biogas Plants", Biomass and Bioenergy, Vol. 32, 551-557.
Weiss, L. W. (1976), Optimal Plant Size and the Extent of Suboptimal Capacity" Cambridge, Mass: Industrial Organization in Honor.
Youn Kim, H. (1999), ″Economic Capacity Utilization and its Determinants: Theory and Evidence″, Review of Industrial Organization 15: 321–339.
Journal of Economics and Modelling
Volume 3, Issue 10 - Serial Number 10
September 2012
Pages 160-189

Files

Share

How to cite

Statistics