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Although economies of scale are relatively well studied in the arts, economies of scope have received less attention. Yet recent trends toward freelancing and technological connectivity make scope economies especially timely in addressing structural challenges to artist-led incubators. This paper offers a conceptual framework for cooperative strategies that employ economies of scope both in the economic sense of joint production and in the financial sense of risk pooling. This framework distinguishes franchise, federation, and resource-sharing organizational structures as developed through case studies of two US-based organizations: ArtBuilt and REC (Resources for Every Creator), placed in a larger context of cooperative organizational strategy in the USA and Europe. The proposed strategies of cooperative networks (quasi-franchises, federations, or resource-sharing networks) also draw on a literature of spatial agglomeration in creative industries. The framework leads to more speculative ideas of “balance-sheet philanthropy” through credit backstopping by foundations, and of novel investment trusts that can be piloted across a range organizations including foundations, grant-makers, artist residency programs, and even for-profit companies engaged in reinsurance. The paper contributes managerial tools and strategies for the creative engagement of capacity building in arts organizations.

In this paper, we investigate whether and under which conditions jointly owning a variable renewable source of electricity (VRES) and an electricity storage generates economies of scope in competitive electricity markets. Using a simple stochastic optimization model that assumes frictionless markets, we analytically show that no economic benefit arises from combining the two assets. This finding is in contradiction to large parts of the literature, which claim that it is in the economic interest of owners of VRES to additionally own electricity storage. We also identify circumstances where our argument does not hold and the combination of storage and VRES could theoretically make economic sense on the level of individual agents. In the last part of the paper, we demonstrate in a numerical case study of the German market that even in cases where our theoretical results do not hold, tying together storage and VRES may produce suboptimal results.

Hospitals have different departments for treating specific diseases. Some hospitals are specialized into one department while others are diversified into many departments. Since many inputs for different departments can be shared, running a diversified hospital is probably less costly than running several specialized hospitals separately due to economies of scope. In this paper, we examine whether expanding the scope of hospitals with a limited number of departments is worthwhile using hospitals in China as the context. The degree of economies of scope is measured in terms of efficiencies gained via a data envelopment analysis. The results show that economies of scope exist for expanding general hospitals lacking one department into general hospitals with all departments. In cases of very specialized hospitals with departments such as dentistry and ophthalmology, it is more efficient to operate them separately. Adding these departments to hospitals with a narrow scope exhibits diseconomies of scope. An expansion network is constructed, with eight optimal paths identified, to guide hospitals of different types to expand their scopes into general comprehensive hospitals stage by stage in a scope-economic way. Since the department to be added is different at each stage of the expansion, the returns to scope do not exhibit a consistent trend for different methods of expansion.

General hospitals across the world are becoming larger (i.e., admitting more patients each year) and more complex (i.e., offering a wider range of services to patients with more diverse care needs). Prior work suggests that an increase in patient volume in a hospital service is associated with reduced costs per patient in that service. However, it is unclear how volume changes in one service affect the costs of the other services in the same hospital. This paper investigates such volume-cost spillover effects between elective and emergency admissions and across specialties, using condition-level panel data comprising all acute hospital trusts in England over a period of 10 years. We provide evidence that increased elective volume at a hospital is associated with an increase in the cost of emergency care (a negative spillover). Furthermore, for emergency admissions, we find evidence that increased emergency activity in one specialty is associated with lower costs of emergency care in other specialties (a positive spillover). By contrast, we find no evidence of spillover effects across specialties for elective admissions. We discuss the implications of these findings for individual hospital growth strategies and for the regional organization of hospital systems. This paper was accepted by David Simchi-Levi, operations management.

As a kind of strategic alliance, basic education groups rely on the knowledge sharing and coordination among group members, in addition to the sharing of tangible assets, to promote education fairness and improve education quality. This paper aims to incentivize and restrict the knowledge sharing among group members. Firstly, the authors analyzed the economies of scale, economies of scope, and the economies of connection brought by the knowledge sharing among group members, and summarized the problems and challenges faced by knowledge sharing. Then, the evolution mechanism of the knowledge sharing among group members was studied from the perspective of game theory, and the suggestions were proposed to improve the incentive and restrictive mechanism of the knowledge sharing among group members. The research results shed a new light on the knowledge sharing in basic education groups.

New banking reforms in Vietnam highlight requirements for banks to diversify into the non-lending business lines. In this study, we analyse the reciprocal relationship between bank lending and fee-based activities and examine the comparative effects of two segments on bank performance in the Vietnamese market from 2007 to 2018. Employing the system of equations with the three-stage least squares (3SLS) estimator and different sets of variables, we find an inverse reciprocal relationship between bank lending ratio and fee-based income share and thereby contribute to the “loss leaders” hypothesis. For bank performance analyses, we apply a rich set of alternative measures for bank profitability, risk-adjusted profits and bank risk, estimated by the generalized method of moments (GMM) estimator for the dynamic panel framework. The results indicate benefits of economies of scope and differences in the risk-return mechanism of lending and fee-based activities. More precisely, we find fee income to positively affect returns on assets/equity and risk-adjusted profits. In sharp contrast, increased lending boosts net interest margins but contains more risks as shown by higher loss provision levels. The essential discrepancy between the two categories of activities hascreated an interesting risk-return trade-off pattern.

Health systems strengthening (HSS) is firmly on the global health and development agenda. While a growing evidence base seeks to understand the effectiveness of HSS, there is limited evidence regarding cost and cost-effectiveness. Without such evidence, it is hard to argue that HSS represents value for money and the level of investment needed cannot be quantified. This paper seeks to review the literature regarding the economic evaluation of HSS from low- and middle-income country (LMIC) settings, and to contribute towards the development of methods for the economic evaluation of HSS. A systematic search for literature was conducted in PubMed, Scopus and the Health Systems Evidence database. MeSH terms related to economic evaluation were combined with key words related to the concept of HSS. Of the 204 records retrieved, 52 were retained for full text review and 33 were included. Of these, 67% were published between January 2015 and June 2019. While many HSS interventions have system wide impacts, most studies (71%) investigated these impacts using a disease-specific lens (e.g. the impact of quality of care improvements on uptake of facility deliveries). HSS investments were categorized, with the majority being investments in platform efficiency (e.g. quality of care), followed by simultaneous investment in platform efficiency and platform capacity (e.g. quality of care and task shifting). This review identified a growing body of work seeking to undertake and/or conceptualize the economic evaluation of HSS in low- and middle-income countries. The majority assess HSS interventions using a disease-specific or programmatic lens, treating HSS in a similar manner to the economic evaluation of medicines and diagnostics. While this approach misses potential economies of scope from HSS investments, it allows for a preliminary understanding of relative value for money. Future research is needed to complement the emerging evidence base.

This study compares the utilization of energy and emission taxes as instruments of pollution control and the promotion of advanced abatement technology adoption in a Cournot oligopoly. We examine multistage games in which the government sets the environmental tax rate. Oligopolistic firms may produce two outputs, a final consumption good, whose production causes pollution, and an abatement product, which reduces pollution. Each firm has two types of abatement technology available. One, which we call “standard,” can be utilized without incurring any fixed cost. The other, which we call “advanced,” requires a fixed cost of adoption. The advanced technology is more efficient than the standard technology. We show that the effectiveness of either type of tax depends on the shape of the multiproduct technology. In the absence of economies of scope in the production of energy and abatement, the energy tax reduces pollution, but it is ineffective in promoting technological change. The emission tax, on the other hand, reduces pollution and it is effective in promoting technological change for sufficiently small fixed costs of adoption. In the presence of economies of scope, both types of taxes are effective whenever taxation is necessary for innovation to occur. However, in terms of innovation incentives, the energy tax outperforms the emission tax.

Local governments may seek efficient public service delivery through scaling up production, and the quest for the optimal local government size has attracted extensive attention of scholars and policy makers. Indeed, if scale matters for local government efficiency, increasing size may be a key factor in achieving more value for money for citizens. As such, getting scale right may contribute significantly to achieving the Sustainable Development Goals (SDGs) as set out in the 2030 Agenda. Nonetheless, there is considerable uncertainty with regard to how scale shapes the average cost of local government service delivery. These uncertainties may have contributed to policy makers and public organizations disregarding the often inconclusive and sometimes contradictory empirical evidence in stimulating and allowing mergers and consolidation in many Western countries. This Special Issue is concerned with economies of scale in local government. Interesting issues to be addressed relate to the existence of general and service specific economies of scale and the implications of both for local government policy regarding various types of scaling (amalgamation, cooperation, and outsourcing). Based on a brief literature review, we inventory a number of issues which warrant further research. One of the conclusions is that the relationship between scale and sustainability is a complex issue with many aspects. Examples include the relation between economies of scale and outsourcing and cooperation, issues concerned with multi-level aspects of scale, and the trade-off that may exist between achieving economies of scale and cost efficiency (e.g., transition cost of mergers). Another conclusion is that no such thing as “one size fits all” exists. Different perspectives may play a role and should be born in mind when suggesting solutions and providing recommendations to achieve sustainable goals.

Transmission and distribution networks are capital intensive segments of the electricity sector and are generally considered natural monopolies. Due to their non-competitive nature, these are subject to independent regulation to prevent the abuse of monopolistic power and to induce competitive behaviour. Effective economic regulation of the electricity networks has become a key target in most developed economies after the 1980s. In Norway, incentive regulation and efficiency benchmarking were introduced in 1997. In Norway, the electricity grid is divided into three levels, namely, central, regional and distribution networks. In this paper, we study two overlooked aspects when analysing the performance of electricity networks: vertical integration and ownership structure. We use a stochastic frontier analysis approach to analyse the performance of Norwegian electricity distribution utilities for the period 2007–2014. We observe that vertical integration between distribution and regional transmission implies higher cost inefficiencies. This indicates that the efficiency gains due to separate management of the networks exceed the economies of coordination from vertical economies of scope. In addition, we find that council ownership entails higher efficiencies. This could be explained by the state having an interest in high-voltage electricity networks, rather than low-voltage ones, and the decentralised model from which the now centralised system was once developed.

Like other nations, Vietnam annually subsidies higher education via state budget to maintain academic operations of public institutions. However, the question of how to fairly and appropriately dis...

While many firms in recent years have started to offer public Application Programming Interfaces (APIs), firms struggle with shaping digital platform strategies that align API design with aspired b...

© 2019 Institution of Chemical Engineers This paper presents a framework to enable case study analysis of sustainable development from business models innovation. Increasing economic development can give rise to trade-offs between economic growth and environmental degradation. Business model innovation can help address such trade-offs by refocusing value creation and capture towards less environmentally damaging activities. Business models therefore provide a critical tool in the move towards sustainable development. In this paper a literature review of existing business model frameworks is conducted and gaps found in the definition and conceptualisation of value, alignment with sustainable development, and assessment of social and environmental impacts and goals. More generally, there is a lack of in depth case studies in the sustainable business model literature. A framework is developed to address these gaps and to allow in depth analysis and understanding of the functioning of business models for sustainable development. Development and piloting of the framework made use of literature and co-operative enquiry. The framework of the paper is applied in depth with a unique energy company case study. Application shows economies of scope to be critical to the delivery of sustainable development. The business model framework addresses equity and distributional issues that are key to sustainable development, but missed by current frameworks.

To clarify the puzzling performance implications of servitization for manufacturers, this study examines how a manufacturer's service supply network moderates the non-linear performance effect of servitization. We test the hypotheses using survey responses collected from 143 servitized manufacturers in China. Our three-step statistical test confirms that servitization has a U-shaped relationship with a manufacturer's financial performance. We also find partial support for the moderating effects of the service supply network, which are characterized by tie strength and structural holes. Specifically, we show that stronger ties between a manufacturer and major service suppliers intensify the U-shaped servitization-performance relationship. However, we do not find support for a moderating effect of service network structural holes, despite their direct negative effect on manufacturer financial performance. By bridging the servitization and supply network literature, this study reveals novel findings that can help manufacturers understand how to leverage their service supplier networks to increase the financial return from their servitization endeavors.

The propounded omnipresent of township malls and aggressive suppliers’ expansion into the emerging markets epitomises the greater potential to create jobs and improve the economic transformation. However, it is important to note that these developments could trammel local traders’ economic prosperity than abrupt veracity of growth and symbiotic trajectory. While the encroachment of mainstream retailers into South African township markets offers business opportunities and economies of scope to consumers. The objectives which underpinned this study: to explore local township traders’ perceptions on the displacement effects from shared value-creation in emerging markets; and to establish the extent of the transformation of retail enterprise development and the displacement of local traders. The study used quantitative methods to analyse the data collected from 301 respondents to amass primary data. The study found that, while local traders appreciate the transformation and development of the townships brought about by shopping mall development, their businesses have been displaced by the emergence of township malls.

I articulate a classical-Marxist theory of technical change in the capitalist labour process, highlighting two contradictions. The management contradiction is the conflict managers experience between coordination (to increase efficiency) and discipline (to ensure valorisation). The workforce contradiction is the tension workers experience between productive socialisation and alienation. I submit that both contradictions were substantially muted from the earliest stages of capitalism through the Fordist stage but have become intensified in the postfordist period. Under postfordism, the basis of efficiency is economies of scope and flexibility, and thus there is a real efficiency advantage to empowering workers, via both multiskilling and employee involvement in problem-solving and decision-making. Postfordist capitalism has thus initiated an intensification of the management and workforce contradictions. In response, capitalist management is increasingly impeding the growth of the productive forces by failing to empower workers.

Due to the importance of analyzing the efficiency of water utilities and the large number of publications in this area, at least five reviews have already been carried out to identify patterns and trends. These reviews aimed to cover worldwide studies, and the results may not correspond to the reality in developing countries. Therefore, this review provides a literature update on the quantitative studies of water and sanitation services, focusing on studies carried out in developing countries. This overview mainly examines the economies of scale and scope, public versus private ownership, and the impact of regulation. As expected, our results show patterns that differ from those found in worldwide reviews (e.g., the influence of regulatory incentives on operator efficiency and economies of scope). In addition, this paper presents patterns regarding the quantitative methods adopted, as well as some trends and areas for possible future research.

We introduce and examine the concept of inter-temporal coordination costs, i.e., the reduction in a firm’s ability to adapt within businesses as a result of its attempts to capture synergies across businesses. Using a modified NK model of search across two landscapes, we show that these costs have an inverted-U relationship with the relatedness between landscapes, and this relationship is moderated by complexity. We further extend the model to examine entry into new markets, and use it to define conditions under which diversifying entrants may be at an advantage relative to either de novo start-ups or entrepreneurial spin-outs. Our study complements and extends recent work on inter-temporal economies of scope, while offering new insights for the literature on diversification, new market entry, and firm adaptation.

The wine sector is of great importance for many national economies of EU countries. The European Union is a world leader in area under grape cultivation and wine production. The goal of the paper was to determine the profitability of farms specializing in winegrape production depending on economic size in selected EU countries in the years 2004-2016. In addition, the level of farm income per 1 ha of viticulture was determined, as well as the level of family income and the share of total subsidies in total income. Overall, it was found that there was an increase in income, however income increased along with economic size. In the examined period, growth was only observed from the fourth economic class (EUR 50-100 thousand). Additionally, the share of income subsidies under CAP decreased along with economic size. The conducted research gave light to information that could prove vital to adapt the European vineyard and wine sector to the opportunities and needs of the market, namely by taking into account the links between economies of scale and economies of scope.

Purpose In total, 14 credit unions have acquired 16 banks and savings institutions since 2012; 7 additional acquisitions are in progress and are expected to close before year-end 2019. The analysis of the population of these acquisitions spans the paths of annual differences in CAMEL ratios. Most acquirers have a somewhat revised capital structure and are often benefiting from economies of scope, as well as economies of scale. Since their acquisitions, the acquiring credit unions have become less risky, measured by simulated CAMEL ratios, and they are lending a larger share of their deposits. There is no apparent financial reason to discourage credit unions from acquiring additional banks and savings institutions. The National Credit Union Administration does not need to be particularly hesitant to allow credit unions to acquire banks and thrifts. Design/methodology/approach Financial analysis is done via simulated CAMEL ratios. Findings After acquiring banks, credit unions are less risky and lend a greater share of their deposits. Research limitations/implications The study analyzes the population of the credit unions that have acquired banks since 2012, but the population consists of 14 banks acquiring 16 credit unions. Practical implications Credit unions should not be prohibited from further acquisitions of banks and thrifts. Social implications Credit union members are better served after a credit union acquires a bank. Originality/value No previous study has explored the effects of credit unions acquiring banks and thrifts, which began in 2012.

In this paper, we argue that social enterprise could represent a means of tackling rural challenges of providing sustainable economic development, addressing the withdrawal of public services and promoting community cohesion. The paper draws upon a review of existing academic as well as policy literature and develops a conceptual framework that helps to understand how to unlock the potential contribution of social enterprises to rural development. Drawing on an exploratory study conducted in two rural areas of Scotland we use interview data from social enterprise stakeholders to populate the conceptual framework and its rural (geographic), policy and social enterprise domains. Our study suggests that social enterprises can potentially enable an integrated approach to addressing local issues at the local level. They can create locally responsive services that fit the rural context. However, unlocking the potential of rural social enterprise may require moving beyond traditional policy silo approaches that treat economic development, community cohesion and public services as separate and disconnected since national policy-making frameworks have not always translated into practice at the rural level. Additionally, policy treatment of social enterprise needs to move beyond efforts to ‘scale up’ and achieve economies of scale. Collaborations between groups of social enterprises, and between social enterprises and public authorities can lead to economies of scope, particularly where strong trust-based relations within communities harness self-help and the co-production of services. With appropriate guidance and support, many rural challenges and needs could be transformed into opportunities for social enterprise development. In highlighting the opportunities and challenges faced by rural social enterprises, the paper suggests potential research gaps that, if filled, could contribute towards recognising and unlocking their full potential., Highlights • Rural social enterprise conceptual framework combines rural, policy and social enterprise domains. • Social enterprises recognise the interconnectedness between different rural needs and potential solutions. • Rural challenges could be transformed into opportunities for social enterprise and community development. • National social enterprise policies are not well-translated into practice at the rural level. • Future success or rural social enterprises depends on breaking down traditional policy silo.

In multichannel retailing, cross-channel integration, which is the integration of different channels, such as brick-and-mortar stores, e-commerce, and mobile retailers, has been a key strategy. However, the effectiveness of cross-channel integration for firm performance remains uncertain. This study examines the impact of cross-channel integration on firm performance–cost efficiency. It uses stochastic frontier analysis to estimate cost efficiency and employs a dynamic panel model to assess the relationship between cross-channel integration, firm-level characteristics, and cost efficiency. The results reveal that cross-channel integration is positively associated with cost efficiency and that the extent of a retailer's experience with e-commerce and level of face-to-face services reduce its effectiveness.