Financial economies of scale
Financial economies of scale
Glossary of business
Definition of financial economies of scale
An economy of scale is where average cost falls as production increases. Economies of scale come about because larger firms are able to lower their unit costs. A financial economy of scale results from the ability of large firms to borrow money on better terms than smaller firms which makes the cost of financing investment lower. This may be because they are seen as a better risk by the financial institution or perhaps because they have access to more efficient ways of raising capital (e.g. equity markets).
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Terminology about business
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Definition and meaning of financial economies of scale
Meaning of financial economies of scale
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