Returns to Scale in the UK

Abstract

We estimate returns to scale in the UK using firm-level data and production function estimation. We follow various methodologies, including the control function approach (e.g. Ackerberg, Caves and Frazer 2015) and the cost share approach (e.g. Gandhi, Navarro and Rivers 2020). Returns to scale is estimated over time, across industries and regions, and over the firm age and size distribution. We find evidence of returns to scale slightly above unity, and that it has risen over time.

Joel Kariel

Econometrics Adviser

My research interests include firm dynamics, productivity, technological change, market power, applied econometrics.