An empirical study of scale economies in the Chinese railway system

This thesis analyzes economies of scale in the Chinese railway system based on data from 1978 to 2000 for all of the railway administrations or corporations by using the theory of scale economies and econometric tools. The study shows that greater rail track length does not mean higher efficiency. Constant returns to scale will be present if the size of rail track and traffic volume increase at the same speed. However, the scale economies will be significant if the traffic volume increases faster than the size of rail track.