Returns-to-Scale in Software Production: A Comparison of Approaches
The literature on the software development industry (summarized in ) contains references to returns-to-scale as a factor in software development productivity. As noted in , most studies have typically related project size to labor productivity. A general finding is that software development tools and more specialized labor are usually employed on larger, in terms of project size, software projects. However, this observation does not necessarily imply increasing returns to a particular input, such as software development tools or more specialized labor. The confusion in the literature stems from the use of the term scale and the more general observation that large projects rarely have the same capital-labor mix as their smaller counterparts. In this paper returns-to-scale estimates are allowed to vary with both project capital-labor mix and project size.
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