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- Title
An Empirical Approach to the Motor Carrier Scale Economies Controversy.
- Authors
Emery, Paul W.
- Abstract
In a recent study of a large group of motor common carriers operating along the Atlantic seaboard a significant amount of evidence was found to substantiate the existence of scale economies within this industry. Profitability and efficiency, the study results prove, increased consistently with increased carrier size. While carrier rates of return more than doubled, from the smallest carriers to the largest, total expenses per ton-mile of operations for the larger carriers were less than half of that of their smaller counterparts. Although many writers in the field of transportation discuss the possibility of the existence of scale economies within the various modes of transportation, few adequately define the term. Many avoid this definitional problem by speaking of diminishing returns to scale or of economies of large size. Even then, the terms used often are not properly defined and described. Much of this ambiguity is due to the fact that economists often are not in agreement as to the validity of this concept. The concept of economies of scale, as commonly Interpreted by economists, implies not only the fact that there may exist certain econoroms resulting entirely from the size of the business enterprise but also that there is an absolute limit to the most efficient size of operations for any given firm. Herein lies the trouble. Many feel that there is no limit, while others feel that there may be but if there is we will never be able to define the precise limit.
- Subjects
AUTOMOTIVE transportation; BUSINESS enterprises; ECONOMIES of scale; INDUSTRIAL costs; BIG business; BUSINESS size; ECONOMICS
- Publication
Land Economics, 1965, Vol 41, Issue 3, p285
- ISSN
0023-7639
- Publication type
Article
- DOI
10.2307/3144863