The advantages or disadvantages firms experience as a result of their size, referred to in the economic literature as returns to scale, are of central importance in many economic models. Increasing returns to scale, whereby unit costs decrease as output volume increases, could explain productivity differences between Europe and the United States. We present fresh evidence on the returns to scale of European firms: most exhibit constant returns to scale, but a non-trivial share also show increasing returns to scale.

Professor Axel A Weber, President of the Deutsche Bundesbank, Keynote Speech held at the 18th Conference of the European Association for Banking and Financial History e. V.

Prof. Dr. Axel A. Weber, President of the Deutsche Bundesbank, 6th Bundesbank Lecture