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132-534: Development of the CN-235 formally commenced in 1980 following the formation of the Airtech International joint venture on 17 October 1979. Its existence was publicly unveiled at the 1981 Paris Airshow . On 11 November 1983, the prototype CN-235 conducted its maiden flight ; the first production aircraft followed on 19 August 1986. On 1 March 1988, the aircraft was put into regular service. Early on,

264-561: A Turkish Air Force CN-235 training mission crashed near Kayseri after entering a spin from which recovery was not possible, killing all three people on board. On 16 May 2001, a Turkish Air Force CN-235 crashed after the pilot lost control, killing all 34 people on board. On 18 May 2001, a Turkish Navy CN-235 crashed after the pilot lost control after reaching an altitude of just 100 feet, killing all 4 people on board. On 29 August 2001, Binter Mediterráneo Flight 8261 (Registration EC-FBC) crash-landed at Málaga , Spain, killing four of

396-439: A 2.2 percent average ROA, while wholly owned and controlled affiliates in the U.S. only realized a 0.7 percent ROA." In European law , the term "joint venture" is an exclusive legal concept, better defined under the rules of company law . In France , the term "joint venture" is variously translated as "association d'entreprises", "entreprise conjointe", "coentreprise" or "entreprise commune". A JV can be brought about in

528-722: A CN-235 operated by the Royal Malaysian Air Force crashed in a swamp in Kuala Selangor. Although there were no casualties amongst the occupants, a local fisherman drowned during the rescue effort. On 17 January 2018, a Turkish Air Force CN-235 on a training mission crashed with two pilots and a technician on board near Isparta . All on board were killed. Data from Airbus Military General characteristics Performance Related development Aircraft of comparable role, configuration, and era Joint venture A joint venture ( JV )

660-713: A JV aimed at defining standards or serving as an "industry utility" that provides a narrow set of services to industry participants. Some major joint ventures include United Launch Alliance , Vevo , Hulu , Virgin Media O2 , Penske Truck Leasing , and Owens-Corning . According to Gerard Baynham of Water Street Partners, there has been much negative press about joint ventures, but objective data indicate that they may actually outperform wholly owned and controlled affiliates . He writes, "A different narrative emerged from our recent analysis of U.S. Department of Commerce (DOC) data, collected from more than 20,000 entities. According to

792-460: A company gains an added benefit by expanding its size. These economies are due to the presence of some resource or competence that is not fully utilized, or to the existence of specific market positions that create a differential advantage in expanding the size of the firms. That growth economies disappear once the scale size expansion process is completed. For example, a company that owns a supermarket chain benefits from an economy of growth if, opening

924-526: A company. By its formation, the JV becomes a new entity with the implications that: On the receipt of the Certificate of Incorporation, a company can commence its business. This is a legal area and is fraught with difficulty as the laws of countries differ, particularly on the enforceability of "heads of" or shareholder agreements. For some legal reasons, it may be called a Memorandum of Understanding . It

1056-591: A differentiated demand with respect to the quality of the product, and assistance before and after the sale. Very different organizational forms can therefore co-exist in the same sector of activity, even in the presence of economies of scale, such as, for example, flexible production on a large scale, small-scale flexible production, mass production, industrial production based on rigid technologies associated with flexible organizational systems and traditional artisan production. The considerations regarding economies of scale are therefore important, but not sufficient to explain

1188-421: A firm's costs, returns to scale describe the relationship between inputs and outputs in a long-run (all inputs variable) production function. A production function has constant returns to scale if increasing all inputs by some proportion results in output increasing by that same proportion. Returns are decreasing if, say, doubling inputs results in less than double the output, and increasing if more than double

1320-427: A more efficient division of labour. The economies of division of labour derive from the increase in production speed, from the possibility of using specialized personnel and adopting more efficient techniques. An increase in the division of labour inevitably leads to changes in the quality of inputs and outputs. Many administrative and organizational activities are mostly cognitive and, therefore, largely independent of

1452-407: A new supermarket, it gets an increase in the price of the land it owns around the new supermarket. The sale of these lands to economic operators, who wish to open shops near the supermarket, allows the company in question to make a profit, making a profit on the revaluation of the value of building land. Overall costs of capital projects are known to be subject to economies of scale. A crude estimate

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1584-496: A principal disadvantage is absence of an interested and influential Chinese party. As of the 3rd Quarter of 2004, WFOEs had replaced EJVs and CJVs as follows: (*)=Financial Vventures by EJVs/CJVs (**)=Approved JVs These enterprises are formed under the Sino-Foreign Investment Act. The capital is composed of value of stock in exchange for the value of the property given to the enterprise. The liability of

1716-496: A product X is lower when a single firm instead of two separate firms produce it. See Economies of scope#Economics . Some of the economies of scale recognized in engineering have a physical basis, such as the square–cube law , by which the surface of a vessel increases by the square of the dimensions while the volume increases by the cube. This law has a direct effect on the capital cost of such things as buildings, factories, pipelines, ships and airplanes. In structural engineering,

1848-741: A production-standard aircraft was conducted on 19 August 1986. Type certification from the Federal Aviation Administration (FAA) was granted on 3 December 1986, permitting the CN-235 to be operated in North America . The first deliveries to customers took place during 1987. On 1 March 1988, the CN-235 officially entered service. By May 1989, there were 133 firm orders for the CN-235, 74 had been placed by military operators while 59 were attributed to civil operators; of these, 85 had been ordered by Indonesian customers while 22 were attributable to Spanish customers alone, and

1980-547: A relationship somewhat similar to the square–cube law. In some productions, an increase in the size of the plant reduces the average variable cost, thanks to the energy savings resulting from the lower dispersion of heat. Economies of increased dimension are often misinterpreted because of the confusion between indivisibility and three-dimensionality of space. This confusion arises from the fact that three-dimensional production elements, such as pipes and ovens, once installed and operating, are always technically indivisible. However,

2112-461: A result, numerous studies have indicated that the procurement volume must be sufficiently high to provide sufficient profits to attract enough suppliers, and provide buyers with enough savings to cover their additional costs. However, Shalev and Asbjornse found, in their research based on 139 reverse auctions conducted in the public sector by public sector buyers, that the higher auction volume, or economies of scale, did not lead to better success of

2244-504: A stretched derivative of the CASA C-212 Aviocar , multiple clean-sheet wide-body aircraft with rectangular and circular-shaped fuselages. The selected configuration for the aircraft featured a relatively wide fuselage for its size, complete with a rear-facing ramp suitable for all-purpose transport duties. Its main cabin facilitated a four-abreast single-aisle seating arrangement, which could accommodate up to 44 passengers in

2376-477: A third MPA-configured aircraft was delivered. In April 2012, Colombia awarded a contract to Telephonics to replace the original radars of the two older CN-235s with the APS-143 OceanEye marine surveillance Radar. In April 2005, Venezuela ordered two CN-235 maritime surveillance aircraft along with ten transport planes. However, during the following year, the transaction was halted due to the refusal of

2508-733: A unit of capacity of many types of equipment, such as electric motors, centrifugal pumps, diesel and gasoline engines, decreases as size increases. Also, the efficiency increases with size. Operating crew size for ships, airplanes, trains, etc., does not increase in direct proportion to capacity. (Operating crew consists of pilots, co-pilots, navigators, etc. and does not include passenger service personnel.) Many aircraft models were significantly lengthened or "stretched" to increase payload. Many manufacturing facilities, especially those making bulk materials like chemicals, refined petroleum products, cement and paper, have labor requirements that are not greatly influenced by changes in plant capacity. This

2640-440: A variety of organizational and business situations and at various levels, such as a production, plant or an entire enterprise. When average costs start falling as output increases, then economies of scale occur. Some economies of scale, such as capital cost of manufacturing facilities and friction loss of transportation and industrial equipment, have a physical or engineering basis . The economic concept dates back to Adam Smith and

2772-487: Is a business entity created by two or more parties, generally characterized by shared ownership , shared returns and risks , and shared governance. Companies typically pursue joint ventures for one of four reasons: to access a new market, particularly emerging market ; to gain scale efficiencies by combining assets and operations; to share risk for major investments or projects; or to access skills and capabilities. Most joint ventures are incorporated, although some, as in

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2904-445: Is a correlating relationship between a firm's total sales and underlying efficiency. Firms with higher productivity will always outperform a firm with lower productivity which will lead to lower sales. Through trade liberalization, organizations are able to drop their trade costs due to export growth. However, trade liberalization does not account for any tariff reduction or shipping logistics improvement. However, total economies of scale

3036-632: Is a historically contingent fact, and not essential to the nature of such enterprises. In the case of agriculture, for example, Marx calls attention to the sophistical nature of the arguments used to justify the system of concentrated ownership of land: Instead of concentrated private ownership of land, Marx recommends that economies of scale should instead be realized by associations : Alfred Marshall notes that Antoine Augustin Cournot and others have considered "the internal economies [...] apparently without noticing that their premises lead inevitably to

3168-404: Is allowed to enter into contracts with appropriate government authorities to acquire land use rights, rent buildings, and receive utility services. In this it is more similar to a CJV than an EJV. WFOEs are expected by PRC to use the most modern technologies and to export at least 50% of their production, with all of the investment is to be wholly provided by the foreign investor and the enterprise

3300-477: Is based on the exporters individual frequency and size. So large-scale companies are more likely to have a lower cost per unit as opposed to small-scale companies. Likewise, high trade frequency companies are able to reduce their overall cost attributed per unit when compared to those of low-trade frequency companies. Economies of scale is related to and can easily be confused with the theoretical economic notion of returns to scale. Where economies of scale refer to

3432-411: Is because labor requirements of automated processes tend to be based on the complexity of the operation rather than production rate, and many manufacturing facilities have nearly the same basic number of processing steps and pieces of equipment, regardless of production capacity. Karl Marx noted that large scale manufacturing allowed economical use of products that would otherwise be waste. Marx cited

3564-604: Is described below. The EJV Law is between a Chinese partner and a foreign company. It is incorporated in both Chinese (official) and in English (with equal validity), with limited liability. Prior to China's entry into WTO – and thus the WFOEs – EJVs predominated. In the EJV mode, the partners share profits, losses, and risk in equal proportion to their respective contributions to the venture's registered capital. These escalate upwardly in

3696-470: Is done in parallel with other activities in forming a JV. Though dealt with briefly for a shareholders' agreement , some issues must be dealt with here as a preamble to the discussion that follows. There are also many issues which are not in the Articles when a company starts up or never ever present. Also, a JV may elect to stay as a JV alone in a "quasi partnership" to avoid any nonessential disclosure to

3828-424: Is expanded, including the aspects concerning the development of knowledge and the organization of transactions, it is possible to conclude that economies of scale do not always lead to monopoly. In fact, the competitive advantages deriving from the development of the firm's capabilities and from the management of transactions with suppliers and customers can counterbalance those provided by the scale, thus counteracting

3960-442: Is one where the costs of production fall when the number of firms in the industry drops, but the remaining firms increase their production to match previous levels. Conversely, an industry exhibits an external economy of scale when costs drop due to the introduction of more firms, thus allowing for more efficient use of specialized services and machinery. Economies of scale exist whenever the total cost of producing two quantities of

4092-505: Is possible within a particular country—for example, it would not be efficient for Liechtenstein to have its own carmaker if they only sold to their local market. A lone carmaker may be profitable, but even more so if they exported cars to global markets in addition to selling to the local market. Economies of scale also play a role in a " natural monopoly ". There is a distinction between two types of economies of scale: internal and external. An industry that exhibits an internal economy of scale

CASA/IPTN CN-235 - Misplaced Pages Continue

4224-608: Is saturating the regional market, thus having to ship products uneconomic distances. Other limits include using energy less efficiently or having a higher defect rate. Large producers are usually efficient at long runs of a product grade (a commodity) and find it costly to switch grades frequently. They will, therefore, avoid specialty grades even though they have higher margins. Often smaller (usually older) manufacturing facilities remain viable by changing from commodity-grade production to specialty products. Economies of scale must be distinguished from economies stemming from an increase in

4356-433: Is that if the capital cost for a given sized piece of equipment is known, changing the size will change the capital cost by the 0.6 power of the capacity ratio (the point six to the power rule ). In estimating capital cost, it typically requires an insignificant amount of labor, and possibly not much more in materials, to install a larger capacity electrical wire or pipe having significantly greater capacity. The cost of

4488-470: Is what will happen if the firm is dissolved, if one of the partners dies, or if the firm is sold. Often, the most successful JVs are those with 50:50 partnership with each party having the same number of directors but rotating control over the firm, or rights to appoint the Chairperson and Vice-chair of the company. Sometimes a party may give a separate trusted person to vote in its place proxy vote of

4620-515: Is within his total control. WFOEs are typically limited liability enterprises. Like with EJVs, but the liability of the directors, managers, advisers, and suppliers depends on the rules which govern the Departments or Ministries which control product liability, worker safety or environmental protection. An advantage the WFOE enjoys over its alternates is enhanced protection of its know-how but

4752-482: The Fokker 50 , ATR 42 and De Havilland Canada DHC-8 . Iberia LAE, Spain's flag carrier , emerged as an early customer, opting to purchase four CN-235s from CASA to serve on its regional routes. It, and its subsidiaries Binter Canarias and Binter Mediterraneo , operated the type between 1989 and 1997, opting to procure several larger ATR 72s to replace it. Numerous Indonesian operators had placed early orders for

4884-596: The Indonesian Air Force . Amongst the first customers for the CN-235 was the French Air and Space Force , which had ordered an initial eight aircraft by May 1989. In April 2010, Hervé Morin , French Minister of Defence , announced the order of eight CN-235-300s from Spain. By 2015, the service had expanded its fleet to 27 aircraft. During mid-2020, a French CN-235 was amongst those assets deployed to Mauritius to assist in pollution control efforts after

5016-658: The MV Wakashio oil spill . Several sizable early orders from the Indonesian armed forces made it the largest customer for the CN-235 early on. By May 1989, the Indonesian Air Force alone had ordered 32 aircraft while the Indonesian Navy had ordered 18 CN-235s, six of which in a maritime surveillance configuration. During December 2009, the Indonesian Navy ordered its first batch of three CN-235 MPAs;

5148-601: The Mexican Navy announced that it would purchase six CN-235s. In November 2011, the first aircraft was accepted by the service; it was configured to conduct search and rescue, disaster relief, and drug interdiction missions. During May 2012, the final of four CN-235 MPAs was delivered to the Mexican Navy. In December 2008, South Korea announced that Indonesian Aerospace's bid had triumphed over four rival submissions, and thus it would order four CN-235-110 MPAs to equip

5280-734: The N-270 , it is a stretched version of the N-245 and is planned to be able to carry up to 70–90 passengers; the original timeframe for development was set between 2019 and 2024. Bangladesh operate the CASA/IPTN CN-235 aircraft. The Bangladesh Air Force has a few CN-235 aircraft in its fleet, which are primarily used for transport, maritime patrol, and various utility roles. The CN-235 is a medium-range twin-engine transport aircraft developed by CASA (Spain) and IPTN (Indonesia), known for its versatility in both military and civilian applications. In

5412-707: The South Korean Coast Guard with; these aircraft, delivered in 2011, had a reported per unit cost of $ 23 million. On behalf of the Royal Jordanian Air Force , a light gunship version of the CN-235 was developed; it was introduced to service in May 2014. Collaborators in the project included the King Abdullah II Design and Development Bureau of Jordan , and the U.S. defense company Orbital ATK . Turkey has become

CASA/IPTN CN-235 - Misplaced Pages Continue

5544-672: The Spanish Air Force . In 2000, the Future Medium Transport Aircraft II (FATAM II) program was launched, under which a batch of nine C-295s was ordered for the Spanish Air Force to take the place of eight CN-235s that were converted from a general transport configuration into maritime patrol and search-and-rescue aircraft, while between four and six CN-235s were assigned to training operations, their reassignment having noticeably depleted

5676-486: The World Trade Organization (WTO) around 2001 has had profound effects on foreign investment. Not being a JV, they are considered here only in comparison or contrast. To implement WTO commitments, China publishes from time to time updated versions of its "Catalogs Investments" (affecting ventures) prohibited, restricted. The WFOE is a Chinese legal person and has to obey all Chinese laws. As such, it

5808-464: The oil and gas industry , are "unincorporated" joint ventures that mimic a corporate entity. With individuals, when two or more persons come together to form a temporary partnership for the purpose of carrying out a particular project, such partnership can also be called a joint venture where the parties are " co-venturers ". The venture can be a business JV (for example, Dow Corning), a project/asset JV intended to pursue one specific project only, or

5940-415: The short-run average total cost (SRATC) curve down and to the right. Economies of scale is a concept that may explain patterns in international trade or in the number of firms in a given market. The exploitation of economies of scale helps explain why companies grow large in some industries. It is also a justification for free trade policies, since some economies of scale may require a larger market than

6072-450: The "constitution" of a company in these countries. The articles of association regulate the interaction between shareholders and the directors of a company and can be a lengthy document of up to 700,000 or so pages. It deals with the powers relegated by the stockholders to the directors and those withheld by them, requiring the passing of ordinary resolutions , special resolutions and the holding of Extraordinary General Meetings to bring

6204-417: The "physical" point of view of the returns to scale. Furthermore, supply contracts entail fixed costs which lead to decreasing average costs if the scale of production increases. This is of important utility in the study of corporate finance . Economies of productive capacity balancing derives from the possibility that a larger scale of production involves a more efficient use of the production capacities of

6336-581: The 47 passengers and crew aboard. The aircraft was scrapped. On 11 February 2013, a CN-235 crashed into a forest 45 km south of Monrovia , Liberia , 8 km to Roberts International Airport , killing 11 people amongst them Souleymane Kelefa Diallo , Guinea army chief. On 1 August 2015 a CN-235-200M operated by the Colombian Air Force crashed in Cesar province, Colombia due to engine failure, killing 11 people. On 26 February 2016,

6468-714: The Air Corps. During 2021, amid the Fall of Kabul and the US withdrawal from Afghanistan , one of the CN-235s was flown to the nation to assist with the evacuation. In 2022, Irish CN-235s have been deployed to provide humanitarian aid to, as well as evacuate wounded civilians from, Ukraine . In December 2002, the Colombian Navy ordered two CN-235 configured for maritime patrol and anti-drug trafficking missions. During July 2010,

6600-595: The Bangladesh Air Force, these aircraft serve roles such as troop transport, cargo airlift, medical evacuation, and maritime surveillance, contributing to the country's defense and logistical capabilities. [REDACTED]   Botswana [REDACTED]   United Arab Emirates On 18 October 1992, Merpati Nusantara Airlines (Registration PK-MNN) CN-235-10 Flight 5601 crashed in Garut , Indonesia, killing all 31 people on board, On 19 January 2001,

6732-402: The CN-235, the original prototypes were quickly adapted to serve as flying test beds to support these efforts. By 1992, multiple versions had already been developed, and more were underway. These were often produced in response to specific customer requirements, such as to perform maritime reconnaissance. Development of the initial versions had been carried out jointly by the two companies. Perhaps

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6864-427: The CN-235; by 1992, there were internal routes served by the type between most of the major cities in the country. The Indonesian operator Merpati Nusantara Airlines emerged as the largest civilian operator of the CN-235, at one point having 15 examples in its fleet alone. In April 1995, the company decided to proceed with a leasing arrangement to operate additional aircraft. During 1992, Aerolíneas Argentinas , which

6996-459: The DOC data, foreign joint ventures of U.S. companies realized a 5.5 percent average return on assets (ROA), while those companies' wholly owned and controlled affiliates (the vast majority of which are wholly owned) realized a slightly lower 5.2 percent ROA. The same story holds true for investments by foreign companies in the U.S., but the difference is more pronounced. U.S.-based joint ventures realized

7128-640: The Founder at board meetings. Recently, in a major case the Indian Supreme Court has held that Memorandums of Understanding (whose details are not in the articles of association) are "unconstitutional" giving more transparency to undertakings. A JV is not a permanent structure. It can be dissolved when: Joint ventures are risky forms of business partnerships . Literature in business and management has paid attention to different factors of conflict and opportunism in joint ventures, in particular

7260-464: The JV's life, giving the option to the foreign investor, by holding higher equity, obtains a faster rate of return with the concurrent wish of the Chinese partner of a later larger role of maintaining long-term control. The parties in any of the ventures, EJV, CJV or WFOE prepare a feasibility study outlined above. It is a non-binding document – the parties are still free to choose not to proceed with

7392-760: The Royal Malaysian Air Force receive the first of three such modified CN235-220M MSA as part of the Malaysian Maritime Security Initiative program. Between 2010 and 2012, the Senegalese Air Force acquired two CN-235s at a reported cost of $ 13 million. In 2013, the service declared it planned to buy two more aircraft for VIP and cargo duties, and that it was also interested in the MPA version as well. During 2018, Senegal ordered two MPA-configured CN-235s,

7524-581: The Turkish Navy heavily patrolled the Black Sea , these have repeatedly detected sea mines and aided in de-mining efforts. The Royal Malaysian Air Force has operated a fleet of CN-235 transports. During early 2020, it was announced that several Malaysian aircraft would be converted into a maritime surveillance configuration using financial assistance from the United States. On 17 June 2022,

7656-536: The US) covering know-how and trademarks and supply-of-equipment agreements. The minimum equity is prescribed for investment truncated, where the foreign equity and debt levels are: There are also intermediary levels. The foreign investment in the total project must be at least 25%. No minimum investment is set for the Chinese partner. The timing of investments must be mentioned in the Agreement and failure to invest in

7788-471: The United States government to allow the transfer of what they deemed to be US technology in the aircraft's avionics . In January 2006, Thailand came to a tentative bartering arrangement with Indonesian Aerospace for ten aircraft, six of which were for the Ministry of Defence and the remaining four for the Ministry of Agriculture. An additional aircraft was ordered on 19 September 2014. During July 2008,

7920-511: The advantages of external economies linked to an increase in the production of an entire sector of activity. However, "those economies which are external from the point of view of the individual firm, but internal as regards the industry in its aggregate, constitute precisely the class which is most seldom to be met with." "In any case - Sraffa notes – in so far as external economies of the kind in question exist, they are not linked to be called forth by small increases in production," as required by

8052-447: The aircraft's value to the Indonesian market and to capture sufficient early orders there that it would allow for economies of scale to make the aircraft highly cost-competitive on the international market. During January 1980, preliminary design work commenced. From 1980 to 1983, the second phase of development took place, starting with the detailed design work, tools manufacturing, component production, final assembly, and cumulating in

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8184-555: The assistance of the German Aerospace Center . Amongst other aspects, the CN-235 proved to have easy handling characteristics. Extensive weight and drag-minimisation efforts were undertaken, one benefit of which was that the subsequent production aircraft were reportedly 10% lighter than the prototypes. The third phase of development was to secure certification and to conduct the aircraft's first delivery to customers. In support of this effort, static and fatigue testing

8316-569: The assumption of free competition to address the study of firms that have their own particular market. This stimulated a whole series of studies on the cases of imperfect competition in Cambridge. However, in the succeeding years Sraffa followed a different path of research that brought him to write and publish his main work Production of commodities by means of commodities ( Sraffa 1966 ). In this book, Sraffa determines relative prices assuming no changes in output, so that no question arises as to

8448-431: The auction. They found that auction volume did not correlate with competition, nor with the number of bidders, suggesting that auction volume does not promote additional competition. They noted, however, that their data included a wide range of products, and the degree of competition in each market varied significantly, and offer that further research on this issue should be conducted to determine whether these findings remain

8580-431: The average cost for all firms as opposed to internal economies of scale which only allows benefits to the individual firm. Advantages that arise from external economies of scale include; Firms are able to lower their average costs by buying their inputs required for the production process in bulk or from special wholesalers. Firms might be able to lower their average costs by improving their management structure within

8712-434: The base of dynamic economies of scale, associated with the process of growth of the scale dimension and not to the dimension of scale per se. Learning by doing implies improvements in the ability to perform and promotes the introduction of incremental innovations with a progressive lowering of average costs. Learning economies are directly proportional to the cumulative production ( experience curve ). Growth economies emerge if

8844-508: The capitalist system is therefore characterized by two tendencies, connected to economies of scale: towards a growing concentration and towards economic crises due to overproduction. In his 1844 Economic and Philosophic Manuscripts , Karl Marx observes that economies of scale have historically been associated with an increasing concentration of private wealth and have been used to justify such concentration. Marx points out that concentrated private ownership of large-scale economic enterprises

8976-461: The cases, the status of the formed enterprise is that of a legal Chinese person which can hire labor directly as, for example, a Chinese national contactor. The minimum of the capital is registered at various levels of investment. Other differences from the EJV are to be noted: Convenience and flexibility are the characteristics of this type of investment. It is therefore easier to find co-operative partners and to reach an agreement. With changes in

9108-452: The chemical industry as an example, which today along with petrochemicals, remains highly dependent on turning various residual reactant streams into salable products. In the pulp and paper industry, it is economical to burn bark and fine wood particles to produce process steam and to recover the spent pulping chemicals for conversion back to a usable form. Large and more productive firms typically generate enough net revenues abroad to cover

9240-581: The completion of initial prototypes. The project was publicly debuted at the 1981 Paris Airshow . In addition to the display of a mock-up, sales contracts were signed and a memorandum of understanding was signed between Airtech and General Electric for the aircraft to be powered by the latter's General Electric CT7 turboprop engine. On 10 September 1983, the first pair of prototypes were officially rolled out simultaneously at Getafe and Bandung in ceremonies attended by both King Juan Carlos I of Spain and President Suharto of Indonesia. On 11 November 1983,

9372-425: The conclusion that, whatever firm first gets a good start will obtain a monopoly of the whole business of its trade … ". Marshall believes that there are factors that limit this trend toward monopoly, and in particular: Piero Sraffa observes that Marshall, in order to justify the operation of the law of increasing returns without it coming into conflict with the hypothesis of free competition, tended to highlight

9504-447: The cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of time . A decrease in cost per unit of output enables an increase in scale that is, increased production with lowered cost. At the basis of economies of scale, there may be technical, statistical, organizational or related factors to the degree of market control. Economies of scale arise in

9636-622: The death of Mao Zedong in 1976, initiatives in foreign trade began to be applied, and law applicable to foreign direct investment was made clear in 1979, while the first Sino-foreign equity venture took place in 2001. The corpus of the law has improved since then. Companies with foreign partners can carry out manufacturing and sales operations in China and can sell through their own sales network. Foreign-Sino companies have export rights which are not available to wholly Chinese companies, as China desires to import foreign technology by encouraging JVs and

9768-464: The development and early production of the CN-235 had been performed as a joint effort, the partnership arrangement between CASA and IPTN was only applicable to the Series 10 and Series 100/110 aircraft. Some of the later versions of the CN-235 have been developed by each company independently of the other's efforts. Accordingly, both companies have produced their own derivatives of the aircraft, such as

9900-455: The directors' decision to bear. A Certificate of Incorporation or the Articles of Incorporation is a document required to form a corporation in the U.S. (in actuality, the state where it is incorporated) and in countries following the practice. In the US, the "constitution" is a single document. The Articles of Incorporation is again a regulation of the directors by the stock-holders in

10032-656: The early stages of developing a new variant of the CN-235, the N-245 , which has been specifically designed to perform civil operations and is able to carry up to 60 passengers. Alternatively also referred to as the CN-235NG , this variant is planned to be fully launched following the completion of the Indonesian Aerospace N-219 project, at one point, it was expected to be fully certified sometime in 2019. A further derivative has been envisioned, referred to as

10164-462: The economies of scale due to the increase in size do not depend on indivisibility but exclusively on the three-dimensionality of space. Indeed, indivisibility only entails the existence of economies of scale produced by the balancing of productive capacities, considered above; or of increasing returns in the utilisation of a single plant, due to its more efficient use as the quantity produced increases. However, this latter phenomenon has nothing to do with

10296-434: The economies of scale which, by definition, are linked to the use of a larger plant. At the base of economies of scale there are also returns to scale linked to statistical factors. In fact, the greater of the number of resources involved, the smaller, in proportion, is the quantity of reserves necessary to cope with unforeseen contingencies (for instance, machine spare parts, inventories, circulating capital, etc.). One of

10428-422: The factors underlying the ever-increasing concentration of capital. Marx observes that in the capitalist system the technical conditions of the work process are continuously revolutionized in order to increase the surplus by improving the productive force of work. According to Marx, with the cooperation of many workers brings about an economy in the use of the means of production and an increase in productivity due to

10560-410: The firm increase, the notions of increasing returns to scale and economies of scale can be considered equivalent. However, if input prices vary in relation to their quantities purchased by the company, it is necessary to distinguish between returns to scale and economies of scale. The concept of economies of scale is more general than that of returns to scale since it includes the possibility of changes in

10692-518: The firm is a perfect competitor in all input markets, and thus the per-unit prices of all its inputs are unaffected by how much of the inputs the firm purchases, then it can be shown that at a particular level of output, the firm has economies of scale if and only if it has increasing returns to scale, has diseconomies of scale if and only if it has decreasing returns to scale, and has neither economies nor diseconomies of scale if it has constant returns to scale. In this case, with perfect competition in

10824-454: The firm is so big in one or more input markets that increasing its purchases of an input drives up the input's per-unit cost, then the firm could have diseconomies of scale in that range of output levels. Conversely, if the firm is able to get bulk discounts of an input, then it could have economies of scale in some range of output levels even if it has decreasing returns in production in that output range. In essence, returns to scale refer to

10956-467: The first CASA-built prototype performed its maiden flight ; on 30 December 1983, the first IPTN-built prototype made its first flight. Unusually, early testing had involved only minimal use of windtunnels , while it was also decided to only construct a pair of prototypes, decisions that constrained and protracted the later flight testing process. New testing facilities in Indonesia were established with

11088-616: The first of these aircraft, based at Juanda Naval base in Surabaya , East Java , were declared operational in October 2013. In November 2016, the Indonesian Air Force also commenced operations with the latest generation of CN-235 MPAs, equipped with winglets and new electronic support apparatus. The Spanish armed forces also placed modest early orders for the type, by May 1989, two VIP -configured CN-235s had been ordered by

11220-592: The first of which was received in 2021. On January 10, 2024, Indonesian President Joko Widodo offered the CN-235 ASW of PT Dirgantara Indonesia for the Philippine Navy during his visit to Manila . Although the CN-235 has been initially designed as a military transport, it has also been offered to civil operators, usually as a commercial airliner. It has not achieved substantial sales in this role compared to competing 50-seat commuter aircraft such as

11352-435: The fixed costs associated with exporting. However, in the event of trade liberalization, resources will have to be reallocated toward the more productive firm, which raises the average productivity within the industry. Firms differ in their labor productivity and the quality of their products, so more efficient firms are more likely to generate more net income abroad and thus become exporters of their goods or services. There

11484-471: The following major ways: In the UK , India , and in many common law countries, a joint-venture (or else a company formed by a group of individuals) must file its memorandum of association with the appropriate authority. This is a statutory document which informs the public of its existence. It may be viewed by the public at the office in which it is filed. Together with the articles of association , it forms

11616-616: The founder of political economy as an autonomous discipline. John Stuart Mill , in Chapter IX of the First Book of his Principles, referring to the work of Charles Babbage (On the economics of machines and manufactories), widely analyses the relationships between increasing returns and scale of production all inside the production unit. In Das Kapital (1867), Karl Marx , referring to Charles Babbage , extensively analyzed economies of scale and concludes that they are one of

11748-423: The government or the public. Some of the issues in a shareholders' agreement are: There are many features which have to be incorporated into the shareholders' agreement which is quite private to the parties as they start off. Normally, it requires noтуОЧ submission to any authority. The other basic document which must be articulated is the Articles, which is a published document and known to members. This repeats

11880-438: The idea of obtaining larger production returns through the use of division of labor. Diseconomies of scale are the opposite. Economies of scale often have limits, such as passing the optimum design point where costs per additional unit begin to increase. Common limits include exceeding the nearby raw material supply, such as wood in the lumber, pulp and paper industry . A common limit for a low cost per unit weight commodities

12012-479: The increase in the division of labour. Furthermore, the increase in the size of the machinery allows significant savings in construction, installation and operation costs. The tendency to exploit economies of scale entails a continuous increase in the volume of production which, in turn, requires a constant expansion of the size of the market. However, if the market does not expand at the same rate as production increases, overproduction crises can occur. According to Marx

12144-567: The indicated time, draws a penalty. Co-operative Joint Ventures (CJVs) are permitted under the Sino-Foreign Co-operative Joint Ventures. Co-operative enterprises are also called Contractual Operative Enterprises. The CJVs may have a limited structure or unlimited – therefore, there are two versions. The limited-liability version is similar to the EJVs in status of permissions – the foreign investor provides

12276-419: The individual phases of the production process. If the inputs are indivisible and complementary, a small scale may be subject to idle times or to the underutilization of the productive capacity of some sub-processes. A higher production scale can make the different production capacities compatible. The reduction in machinery idle times is crucial in the case of a high cost of machinery. A larger scale allows for

12408-539: The influence of parent control structure, ownership change, and volatile environment. Government procurement regulations, such as the Federal Acquisition Regulation (FAR) in the United States, may specify how joint ventures are to be approached as suppliers or confirm that a joint venture or other form of contractor partnering is seen as a "desirable" arrangement for supplying to government. The FAR states that The Government will recognize

12540-405: The integrity and validity of contractor team arrangements [including joint ventures], provided the arrangements are identified and company relationships are fully disclosed in an offer or, for arrangements entered into after submission of an offer, before the arrangement becomes effective. The Government will not normally require or encourage the dissolution of contractor team arrangements. Under

12672-446: The largest operator of the CN-235, by October 1998, it already had placed cumulative orders for 52 transport-configured aircraft, and would order an additional nine CN-235 MPAs by the end of the year. During the 2000s, a modification programme was undertaken to equip 19 Turkish Navy and coastguard aircraft with new maritime surveillance equipment supplied mainly by Thales . Throughout the 2022 Russian invasion of Ukraine , CN-235 MPAs of

12804-719: The latest technologies. Under Chinese law, foreign enterprises are divided into several basic categories. Of these, five will be described or mentioned here: three relate to industry and services and two as vehicles for foreign investment. Those five categories of Chinese foreign enterprises are: the Sino-Foreign Equity Joint Ventures (EJVs), Sino-Foreign Co-operative Joint Ventures (CJVs), Wholly Foreign-Owned Enterprises (WFOE), although they do not strictly belong to Joint Ventures, plus foreign investment companies limited by shares (FICLBS), and Investment Companies through Foreign Investors (ICFI). Each category

12936-480: The law, it becomes possible to merge with a Chinese company for a quick start. A foreign investor does not need to set up a new corporation in China. Instead, the investor uses the Chinese partner's business license, under a contractual arrangement. However, under the CJV, the land stays in the possession of the Chinese partner. There is another advantage: the percentage of the CJV owned by each partner can change throughout

13068-402: The majority of funds and technology and the Chinese party provides land, buildings, equipment, etc. However, there are no minimum limits on the foreign partner which allows him to be a minority shareholder. The other format of the CJV is similar to a partnership where the parties jointly incur unlimited liability for the debts of the enterprise with no separate legal person being created. In both

13200-424: The marginalist theory of price. Sraffa points out that, in the equilibrium theory of the individual industries, the presence of external economies cannot play an important role because this theory is based on marginal changes in the quantities produced. Sraffa concludes that, if the hypothesis of perfect competition is maintained, economies of scale should be excluded. He then suggests the possibility of abandoning

13332-613: The most dense seating configuration. The design philosophy of "a big aircraft in a small plane" was practiced, leading to be equipped to suit various situations and operating conditions present in both industrialised and developing countries. This led to the pursuit of performance attributes such as good accessibility for cargo transportation, the quick and convenient conversion between cargo and passenger transport operations, along with readiness to be equipped to perform other roles such as aerial firefighting , cropdusting , and other niche roles. Many features were specifically pursued as to ensure

13464-651: The most significant derivative of the aircraft was launched in 1995 by CASA in the form of a stretched CN-235. This aircraft would be produced as the C-295 . Indonesia has sought greater autonomy from Airbus (whom CASA has been integrated into) in the CN-235 manufacturing process; the Indonesian Ministry of Defence (MoD) has made this objective a part of the offset conditions should the Airbus A400M Atlas strategic transport aircraft be procured for

13596-496: The new aircraft. Management comprised senior members of both companies, such as Airtech's president also being the president of IPTN, while its vice president was also the president of CASA. During November 1979, the first technical team visit from IPTN was made to CASA's Madrid facilities, while the first joint meeting was held in Bandung two months later. During the first half of 1980, various configurations were studied, including

13728-411: The output market the long-run equilibrium will involve all firms operating at the minimum point of their long-run average cost curves (i.e., at the borderline between economies and diseconomies of scale). If, however, the firm is not a perfect competitor in the input markets, then the above conclusions are modified. For example, if there are increasing returns to scale in some range of output levels, but

13860-475: The output. If a mathematical function is used to represent the production function, and if that production function is homogeneous , returns to scale are represented by the degree of homogeneity of the function. Homogeneous production functions with constant returns to scale are first degree homogeneous, increasing returns to scale are represented by degrees of homogeneity greater than one, and decreasing returns to scale by degrees of homogeneity less than one. If

13992-405: The presence of significant economies of scale. This contradiction, between the empirical evidence and the logical incompatibility between economies of scale and competition, has been called the 'Cournot dilemma'. As Mario Morroni observes, Cournot's dilemma appears to be unsolvable if we only consider the effects of economies of scale on the dimension of scale. If, on the other hand, the analysis

14124-450: The price of inputs when the quantity purchased of inputs varies with changes in the scale of production. The literature assumed that due to the competitive nature of reverse auctions , and in order to compensate for lower prices and lower margins, suppliers seek higher volumes to maintain or increase the total revenue. Buyers, in turn, benefit from the lower transaction costs and economies of scale that result from larger volumes. In part as

14256-569: The production of a given plant. When a plant is used below its optimal production capacity , increases in its degree of utilization bring about decreases in the total average cost of production. Nicholas Georgescu-Roegen (1966) and Nicholas Kaldor (1972) both argue that these economies should not be treated as economies of scale. The simple meaning of economies of scale is doing things more efficiently with increasing size. Common sources of economies of scale are purchasing (bulk buying of materials through long-term contracts), managerial (increasing

14388-415: The production of each aircraft was divided, 65% being performed by IPTN while the remainder was performed by CASA. The vast majority of CN-235s have been produced for military customers, several airlines have opted to buy limited numbers for regional services as well. In addition to the standard aircraft, specialised CN-235s have been configured into armed gunships and maritime patrol aircraft . While both

14520-474: The project. The feasibility study must cover the fundamental technical and commercial aspects of the project, before the parties can proceed to formalize the necessary legal documentation. The study should contain details referred to earlier under Feasibility Study (submissions by the Chinese partner). There is basic law of the PRC concerning enterprises with sole foreign investment controls, WFOEs. China's entry into

14652-400: The reasons firms appear is to reduce transaction costs . A larger scale generally determines greater bargaining power over input prices and therefore benefits from pecuniary economies in terms of purchasing raw materials and intermediate goods compared to companies that make orders for smaller amounts. In this case, we speak of pecuniary economies, to highlight the fact that nothing changes from

14784-540: The remainder to international customers. In comparison to international competitors, such as the De Havilland Canada Dash 8 and the ATR 42 , it was a slightly slower aircraft but had a relatively wide body, making it favourable for moving containerised cargos and even jet engines , a task traditionally performed by much larger aircraft. As per the early production arrangements, roughly 65% of each aircraft

14916-549: The rules applicable to public procurement in the European Union , public bodies may insist that suppliers intending to provide goods and services through a joint partnership accept joint liability for the execution of the contract. According to a 2003 report of the United Nations Conference on Trade and Development , China was the recipient of US$ 53.5 billion in direct foreign investment, making it

15048-440: The same proportion as the increase in registered capital. The JV contract accompanied by the articles of association for the EJV are the two most fundamental legal documents of the project. The Articles mirror many of the provisions of the JV contract. In case of conflict the JV document has precedence. These documents are prepared at the same time as the feasibility report. There are also the ancillary documents (termed "offsets" in

15180-441: The same when purchasing the same product for both small and high volumes. Keeping competitive factors constant, increasing auction volume may further increase competition. The first systematic analysis of the advantages of the division of labour capable of generating economies of scale, both in a static and dynamic sense, was that contained in the famous First Book of Wealth of Nations (1776) by Adam Smith , generally considered

15312-426: The scale of production. When the size of the company and the division of labour increase, there are a number of advantages due to the possibility of making organizational management more effective and perfecting accounting and control techniques. Furthermore, the procedures and routines that turned out to be the best can be reproduced by managers at different times and places. Learning and growth economies are at

15444-562: The service's medium transport fleet. In December 2007, Spain ordered a pair of CN-235 MPA for the Guardia Civil, making it the first fixed-wing aircraft to be operated by the agency. During the early 1990s, the Irish Air Corps became interested in the type, initially opting to lease a single aircraft directly from CASA in 1992. Two years later, a pair of CN-235s configured for maritime surveillance operations were delivered to

15576-435: The shareholders agreement as to the number of directors each founder can appoint to the board of directors; whether the board controls or the founders; the taking of decisions by simple majority (50%+1) of those present or a 51% or 75% majority with all directors present (their alternates/ proxy ); the deployment of funds of the firm; extent of debt; the proportion of profit that can be declared as dividends; etc. Also significant

15708-423: The shareholders, including debt, is equal to the number of shares purchased by each partner. Economies of scale 1800s: Martineau · Tocqueville  ·  Marx ·  Spencer · Le Bon · Ward · Pareto ·  Tönnies · Veblen ·  Simmel · Durkheim ·  Addams ·  Mead · Weber ·  Du Bois ·  Mannheim · Elias In microeconomics , economies of scale are

15840-427: The size of the company and the market structure. It is also necessary to take into account the factors linked to the development of capabilities and the management of transaction costs. External economies of scale tend to be more prevalent than internal economies of scale. Through the external economies of scale, the entry of new firms benefits all existing competitors as it creates greater competition and also reduces

15972-446: The specialization of managers), financial (obtaining lower- interest charges when borrowing from banks and having access to a greater range of financial instruments), marketing (spreading the cost of advertising over a greater range of output in media markets ), and technological (taking advantage of returns to scale in the production function). Each of these factors reduces the long run average costs (LRAC) of production by shifting

16104-449: The strength of beams increases with the cube of the thickness. Drag loss of vehicles like aircraft or ships generally increases less than proportional with increasing cargo volume, although the physical details can be quite complicated. Therefore, making them larger usually results in less fuel consumption per ton of cargo at a given speed. Heat loss from industrial processes vary per unit of volume for pipes, tanks and other vessels in

16236-475: The stretched EADS CASA C-295 and the passenger-orientated Indonesian Aerospace N-245 . Over 240 of all versions of CN-235 are in service, and the type has reportedly accumulated more than 500,000 flight hours. Its largest user is Turkey , which operates 59 aircraft. The CN-235 has been conceived of during the late 1970s as a twin- turboprop powered transport capable of accommodating up to 35 passengers or various military payloads. It had been observed that there

16368-399: The tendency towards a monopoly inherent in economies of scale. In other words, the heterogeneity of the organizational forms and of the size of the companies operating in a sector of activity can be determined by factors regarding the quality of the products, the production flexibility, the contractual methods, the learning opportunities, the heterogeneity of preferences of customers who express

16500-417: The variation in the relationship between inputs and output . This relationship is therefore expressed in "physical" terms. But when talking about economies of scale, the relation taken into consideration is that between the average production cost and the dimension of scale. Economies of scale therefore are affected by variations in input prices. If input prices remain the same as their quantities purchased by

16632-556: The variation or constancy of returns. In 1947, DuPont engineer Roger Williams, Jr. (1930-2005) published a rule of thumb that costs of chemical process are roughly proportional to the tonnage in power ~0.6 . In the following decades it became widely adopted other engineering industries and terrestrial mining, sometimes (e. g., in electrical power generation) with modified exponential scaling factors. It has been noted that in many industrial sectors there are numerous companies with different sizes and organizational structures, despite

16764-426: The world's largest recipient of direct foreign investment for the first time, to exceed the US. Also, it approved the establishment of nearly 500,000 foreign-investment enterprises. The US had 45,000 projects by 2004 with an in-place investment of over 48 billion. Until recently, no guidelines existed on how foreign investment was to be handled due to the restrictive nature of China toward foreign investors. Following

16896-420: Was a growing global market for such transports, while there was also a need in the domestic market. The Spanish aerospace company Construcciones Aeronáuticas SA (CASA) was keen to seek out international collaboration to develop this concept into a working programme, and promptly approach the newly formed Indonesian company IPTN (later known as Indonesian Aerospace or PT. Dirgantara Indonesia ). The company

17028-473: Was a subsidiary of Iberia at that time, ordered a pair of CN-235s to be operated by its own subsidiary, Austral . In August 2006, it was reported that several CASA CN-235-10 were in service with African airlines, including two operated by Safair and one with Tiko Air . Around 2007, Asian Spirit operated a lone CN-235-220 in the Philippines. During 2015, Indonesian Aerospace announced that they were in

17160-528: Was conducted by the Serpong Laboratory for Structural Testing. By September 1984, orders for several dozen aircraft had been secured at a reported unit cost of $ 6m; many of these early orders for the type had originated from local customers within the two partner company's home nations. Certification from both the Spanish and Indonesian authorities was received on 20 June 1986; the first flight of

17292-522: Was offered an equal share in the venture along with technology transfer opportunities from CASA, and was presented as being mutually beneficial from an economic standpoint. Coincidentally, IPTN had been independently looking into possible configurations for such an aircraft prior to CASA's approach. The presented terms being agreeable, CASA and IPTN quickly formalised the programme as a joint venture initiative; on 17 October 1979, they formed Airtech International to design, develop, manufacture, and market

17424-682: Was produced in Bandung, while 35% was manufactured in Getafe; this workshare arrangement was the case regardless of whether rollout occurred in Spain or Indonesia. While the airframe was fully produced locally by IPTN, the engines, control and communication systems were all produced in either Europe or the United States. The lower wages present in Indonesia have been a key factor in enabling the CN-235 to be economically produced at its relatively low purchase price. Both CASA and IPTN were keen to further develop

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