A Study on Flexible Multi-Product Approach which is Presented for The Economies of Scale

ABSTRACT

This study provides an empirical examination of economies of scale and scope in the creation of research and technology transfer outputs within the public university system of Spain. We use the flexible fixed cost quadratic function, which correlates total university R&D spending with TTO budgets and other research and TTO outputs, to calculate ray economies of scale, particular economies of scale, and economies of scope. Our findings show that economies of scale in both rays and research can save up to 100% of the mean annual cost. Depending on the nature of the product, the economies of scale enabled by technology transfer might be worth as much as 150% of the average R&D budget in use today. Additionally, we find that cost subadditivity operates as a positive restriction, suggesting the existence of economies of scale.

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