Methodological Considerations Regarding the Estimated Returns to Scale in Case of Cobb-douglas Production Function

In case of a Cobb-Douglas production function, the feasible estimation of return to scale is restricted both by the type of output growth and by the type of collinearity which occur during the estimation process. In this context, it is defined the indicator “Reference value of returns to scale” in order to surpass difficulties generated especially by harmful collinearity. Having in mind the above-mentioned indicator, it is proposed an analysis methodology in order to emphasize the role of proper elasticities of the output related to production factors, on the one hand, and the impact of type of collinearity in obtaining the estimated returns to scale, on the other hand. The proposed analysis methodology is practically used by considering statistical data related to a bi- decennial cycle of Romania's economy evolution.