Returns to Scale, Technical Progress and Output Growth in Branches of Industry: The Case of Soviet Republics, 1962-74.

In this paper the degree of returns to scale and the rate of technical progress in major branches of Soviet industry are estimated using Soviet Republic data and a production model which is plausible on a priori grounds. The results suggest that each branch is characterized by a different production function. However, the hypothesis of increasing returns to scale is consistently refuted by the estimates. Comparisons of the estimated parameters with similar estimates for Eastern Europe and the United States reveal that the degree of returns to scale and the rate of technical progress in similar Soviet, East European, and American branches differ much less than many suppose. Copyright 1987 by Scottish Economic Society.