Type of Economies of Scale in Taiwan’s Cycling Industry: The Application of Cost Function

• Main Authors: Hung-Tien Tsai, 蔡宏典
• Other Authors: Chung-Cheng Yang
• Format: Others
• Language: zh-TW
• Published: 2019
• Online Access: http://ndltd.ncl.edu.tw/handle/jfnc62

博士 === 國立雲林科技大學 === 會計系 === 107 === Introduction:This study aimed to apply cost function to analyze the cost structure of Taiwan’s sport bike industry to estimate the ecomonies of scale. We obtained the panel data from TEJ and used seemingly unrelated regressions model to verify whether there are differences between the cost structures of three sport bike companies in Taiwan and further tested which cost function is more suitable for this study. By means of the result of above, we could calculate the economies of scale of Taiwan’s sport bike industry. One of the most concerned issues of Labor Standards Act we focused on is “one fixed day off and one flexible rest day”. Therefore, how the labor policy would impact on the cost structure of Taiwan’s sport bike industry has been researched. In order to provide more objective data as a reference for the industry, the economies of scale and optimal production scale of this indusrty have become a necessary and important research topic for the current bike’s companies. Methods: Translog and Cobb-Douglas were used to represrnt the relation between cost and inputs in Taiwan’s sport bike industry. We used a panel data quarterly of the three listed firms during 2012 - 2017 to estimate the model. We also used the Cobb-Douglas cost function to measure the efficiency of this industry and found the optimal production scale. Results: First, we could conclude that the Translog function is more suitable for the industry in Taiwan. Second, through calculating the partial of the translog equation, the result showed that the industry has diseconomies of scale. Third, we used dummy variable to test whether the labor policy has impact on the cost structure of the industry. The result indicated that the labor policy indeed effected the change of the cost structure of the industry.Finally,the optimal production scale will be at the intersection of marginal cost and average cost. Also the optimal scale of the industry occurred in the fourth quarter during 2015-2017 in Giant.Conclusion: (1)According to the results, we suggest that the three firms might optimize the cost structure, and even conduct recapitalization to promote the efficiency of the asset utilization, so that the industry could achieve optimal allocation of resources namely economies of scale.(2) The government also could recommend the foreign enterprises to upgrade the sport bike industry’s level and encourage the domestic enterprises to pay attention to the value of labor. (3)The ultimate goal of this research is to provide an extensive depth of the industry and enrich the study topics in the sports field of academic research. When an enterprise expands, it will use more advanced and specialized equipments to improve their management efficiency and reduce average cost. Keywords: sport bike industry, one fixed day off and one flexible rest day, translog model, economies of scale, the optimal production scale