innovation in the energy sector lessons learnt from r d expenditures and patents in selected iea countries abstract long time series of the iea and international patent offices offer a huge potential for scientific investigations of the energy innovation process thus this paper deals with a broad literature review on innovation drivers and barriers and an analysis of the knowledge induced by public research and development expenditures r d and patents in the energy sector the cumulative knowledge stock induced by public r d expenditures in 14 investigated iea countries is 102 3 bn eur in 2013 nuclear energy has the largest share of 43 9 bn eur followed by energy efficiency accounting for 14 9 bn eur fossil fuels with 13 5 bn eur and renewable energy with 12 1 bn eur a regression analysis indicates a linear relation between the gdp and the cumulative knowledge with each billion eur of gdp leading to an additional knowledge of 3 1 mil eur however linearity is not given for single energy technologies further the results show that appropriate public r d funding for research and development associated with a subsequent promotion of the market diffusion of a niche technology may lead to a breakthrough of the respective technology

on the relationship between volume reaction and consensus of investors implications for interpreting tests of information content associate professor university of chicago i gratefully acknowledge the generous assistance of nicholas dopuch and richard leftwich in the preparation and editing of this manuscript as well as comments and suggestions offered by the ohio state accounting colloquium i also acknowledge earlier correspondence with nils hakansson concerning the proof employed in this paper and jerold zimmerman concerning the issue of volume reaction any remaining errors are solely my responsibility accepted for publication july 1980 this is somewhat in contrast to discussion of the relationship between volume reaction and information when the information is distributed asymmetrically among investors copeland 1976 for example discusses a sequential information arrival model in which an element of information is disclosed at no cost to homogeneous traders one at a time during a trading period morse 1979 surveys more recent work on the effect of asymmetrically distributed information however information which is distributed asymmetrically is fundamentally different from information which is made publicly available in the former situation trading occurs because one group of investors has access to information not available to some other group whereas in the latter situation trading occurs despite the fact that all investors come to know the information simultaneously

discount rate changes stock market returns volatility and trading volume evidence from intraday data and implications for market efficiency we examine the eaect of discount rate changes on stock market returns volatility and trading volume using intraday data equity returns generally respond negatively and significantly to the unexpected announcements however the eaect of expected changes on equity returns is insignificant furthermore our results indicate that equity prices respond to announcements within the trading period hour after the information release an indication of a return reversal is too small to cover the full transaction costs unexpected discount rate changes also contribute to higher market volatility although the volatility is short lived similarly unexpected changes in discount rates induce larger trading volume while expected changes do not abnormal trading volume occurs only in period t our results also support the notion that unexpected changes in the discount rates impact market returns irrespective of the federal reserve operating procedures 1999 elsevier science b v all rights reserved

the interrelation of stock and options market trading volume data this research empirically investigates the relation between common stock and call option trading volumes the paper hyothesizes and tests a sequential flow of information between the stock and option markets if information trading for cboe listed firms is predominantly accomplished through option trading then existing research methodologies may be biased against finding any significant economic consequences in those instances where option listing is an important variable results indicate that trading in call options leads trading in the underlying shares with a one day lag black 2 suggests that information traders may prefer trading in options rather than shares due to economic incentives provided by reduced transaction costs capital requirements and trading restrictions and due to the greater action afforded by option trading manaster and rendleman 12 empirically support black s 2 option information trading preference finding incremental information content in option prices up to twenty four hours prior to its reflection in stock prices jennings and starks 10 report that the stock price adjustment process upon arrival of new information differs for those firms listed on the chicago board option exchange cboe and they demonstrate that stock price adjustment to new information occurs more rapidly for firms with listed call options the results in both papers appear to warrant consideration of an optiontrading variable in the design of empirical tests both manaster and rendleman 12 and jennings and starks 10 investigate the price relation between shares and call options this paper investigates trading volume copeland 4 posits the use of trading volume as a proxy for the rate of information arrival he concludes that the relation between absolute value of price changes and volume is positive and linear if one accepts a sequentialinformation arrival hypothesis as valid the present research hypothesizes and tests a sequential flow of information between the stock and option markets analyses presented are based on econometric tests for causality1 derived from the works of granger 6 and sims 22 if information trading takes place

market based empirical research in accounting a review interpretation and extension a decade and a half of the most concerted and ambitious research effort in accounting history is evaluated here it is the search into the relationship between publicly disclosed accounting information and the consequences of the use of this information by the major group of usersequity investors as such consequences are reflected in characteristics of common stocks traded in major exchanges this research effort known as market based accounting research mbar obtained its impetus from major developments in finance theory during the late 1950s and early 1960s these were the portfolio selection theory and its offspring the capital asset pricing model capm and the concept of informationally efficient capital markets ecm subsequent developments in information economics agency theory and optimal incentive signaling models were quickly incorporated into mbar while the impetus to this line of research came from other disciplines accounting was not only a beneficiary but also to a modest extent a benefactor mbar is relevant to the study of capital market efficiency the capm information economics and regulation this contribution distinguishes mbar from most accounting areas whose contributions to other disciplines are negligible in

testing for the presence of some features of increasing returns to adoption factors in energy system dynamics an analysis via the learning curve approach the purpose of this paper is to explain the sources of energy system lock in it presents a comparative analysis of the respective contributions of some features of increasing returns to adoption factors i e learning by doing learning by searching and returns to scale effects in explaining the technological change dynamics in the energy system the paper is technically based on a critical analysis of the learning curve approach econometric estimation of learning and scale effects inherent to seven energy technologies were performed by the use of several learning curve specifications these specifications permit to deal with some crucial issues related to the learning curve estimation which are associated with the problem of omitted variable bias the endogeneity effects and the choice of learning indicators results show that dynamic economies from learning effects coupled with static economies from scale effects are responsible for the lock in phenomena of the energy system they also show that the magnitude of such effects is correlated with the technology life cycle maturity in particular results point out that 1 the emerging technologies exhibit low learning rates associated with diseconomies of scale which are argued to be symptomatic of the outset of the deployment of new technologies characterized by diffusion barriers and high level of uncertainty 2 the evolving technologies present rather high learning rates meaning that they respond quickly to capacity expansion and r d activities development 3 conventional mature technologies display low learning rates but increasing returns to scale implying that they are characterized by a limited additional diffusion prospects

supplementing an emissions tax by a feed in tariff for renewable electricity to address learning spillovers abstract in the presence of learning spillovers related to renewable energy technologies an optimal strategy to mitigate climate change should complement an emissions tax by a subsidy for renewables this article addresses the question how such subsidy should be designed it is shown that the widely used approach of a revenue neutral fixed feed in tariff can yield an optimal outcome under restrictive conditions only it has to be adapted continuously as the electricity price changes moreover funding the tariff by a surcharge on the electricity price has important implications for the design of the emission tax the optimal tax rate has to be below the pigovian level differentiated across fossil fuels and adapted over time as the patterns of technological development change these requirements may pose a formidable challenge for practical decision making however it is important to point out that the eventual choices made with respect to the design and funding of a feed in tariff have to be based on a careful and more comprehensive policy assessment including inter alia economic effects beyond the electricity sector and existing institutional constraints

climate change financial stability and monetary policy using a stock flow fund ecological macroeconomic model we analyse i the effects of climate change on financial stability and ii the financial and global warming implications of a green qe programme emphasis is placed on the impact of climate change damages on the price of financial assets and the financial position of firms and banks the model is estimated and calibrated using global data and simulations are conducted for the period 2015 2115 four key results arise first by destroying the capital of firms and reducing their profitability climate change is likely to gradually deteriorate the liquidity of firms leading to a higher rate of default that could harm both the financial and the non financial corporate sector second climate change damages can lead to a portfolio reallocation that can cause a gradual decline in the price of corporate bonds third financial instability might adversely affect credit expansion and the investment in green capital with adverse feedback effects on climate change fourth the implementation of a green qe programme can reduce climate induced financial instability and restrict global warming the effectiveness of this programme depends positively on the responsiveness of green investment to changes in bond yields

price volatility trading volume and market depth evidence from futures markets the relations between volume volatility and market depth in eight physical and financial futures markets are examined evidence suggests that linking volatility to total volume does not extract all information when volume is partitioned into expected and unexpected components the paper finds that unexpected volume shocks have a larger effect on volatility further the relation is asymmetric the impact of positive unexpected volume shocks on volatility is larger than the impact of negative shocks finally consistent with theories of market depth the study shows large open interest mitigates volatility

does anticipated information impose a cost on risk averse investors a test of the hirshleifer effect this paper theoretically and empirically investigates how the risk of future adverse price changes created by the anticipated arrival of information influences risk averse investors trading decisions in institutionally imperfect capital markets specifically i examine how the selling activity of individual investors immediately following an earnings announcement is influenced by the tradeoff between risk sharing benefits of immediate trade and explicit transaction costs imposed on such trades consistent with my theoretically derived predictions i find that investors current trading decisions are less sensitive to the incremental transaction costs created by short term capital gains taxes on trading profits as both the duration and intensity of the risk of future adverse price changes increase this evidence is consistent with an incremental cost to investors that results from the revelation of precise information which is commonly referred to as the hirshleifer effect

green innovation value chain analysis of pv solar power abstract governments around the world have employed a variety of generous subsidies to help promote and develop clean energy technologies in the hope that they will widely replace dirtier carbon based power sources unfortunately these subsidies have not prevented numerous green technology bankruptcies including the infamous 2011 closure of the california based solar panel producer solyndra and these failures have cost taxpayers and private investors billions in lost capital the green innovation value chain givc provides a possible framework for determining the diffusion prospects of green technologies through environmental and financial comparisons to conventional alternatives across the separate chain links comprised of manufacturers distributors customers government and the environment the givc framework is used here to analyze the photovoltaic solar power chain where financial deficits are found in each link that will need to be reduced or eliminated through technology advancements subsidies or changes in market conditions in order to provide the conditions necessary for the technology to achieve mass market acceptance and positive financial returns

march madness in wall street what does the market learn from stress tests abstract annual stress tests have become a regular part of the supervisors toolkit following the global financial crisis we investigate their market implications in the united states by looking at price and trade reactions as well as information asymmetry and uncertainty indicators around the tests and bank behavior after the tests the evidence we present supports the notion that there is important new information in stress tests this is particularly the case during crisis moreover public disclosure appears not to adversely affect informational asymmetries and uncertainties importantly public disclosure of stress test results and methodology does not seem to have reduced private incentives to generate information or to have led to distorted incentives

effects of technological learning and uranium price on nuclear cost preliminary insights from a multiple factors learning curve and uranium market modeling this paper studies the effects of returns to scale technological learning i e learning by doing and learning by searching and uranium price on the prospects of nuclear cost decrease we use an extended learning curve specification named multiple factors learning curve mflc in a first stage we estimate a single mflc in a second stage we estimate the mflc under the framework of simultaneous system of equations which takes into account the uranium supply and demand this permits not only to enhance the reliability of the estimation by incorporating the uranium price formation mechanisms in the mflc via the price variable but also to give preliminary insights about uranium supply and demand behaviors and the associated effects on the nuclear expansion results point out that the nuclear cost has important prospects for decrease via capacity expansion i e learning by doing effects in contrast they show that the learning by searching as well as the scale effects have a limited effect on the cost decrease prospects conversely results also show that uranium price exerts a positive and significant effect on nuclear cost implying that when the uranium price increases the nuclear power generation cost decreases since uranium is characterized by important physical availability and since it represents only a minor part in the total nuclear cost we consider that in a context of increasing demand for nuclear energy the latter result can be explained by the fact that the positive learning effects on the cost of nuclear act in a way to dissipate the negative ones that an increase in uranium price may exert further results give evidence of important inertia in the supply and demand sides as well as evidence of slow correlation between the uranium market and oil market which may limit the inter fuels substituability effects that is nuclear capacity expansion and associated learning by doing benefits

stock splits and stock dividends why who and when this study investigates empirically why firms split their stock or distribute stock dividends and why the market reacts favorably to these distributions the findings suggest that stock splits are mainly aimed at restoring stock prices to a normal range some support can also be found for the oft mentioned signalling motive of stock splits stock dividends are altogether different from stock splits and they appear to be a decreasing phenomenon the clue to stock dividend distributions may lie in their perceived substitution for relatively low cash dividends neither stock splits nor stock dividends are recent phenomena the latter dates back to the elizabethan age among the first to declare such dividends was the east india company which while enjoying great prosperity declared in 1682 a stock dividend of one hundred percent during the eighteenth and nineteenth centuries stock dividends were quite frequently distributed by british companies in the united states an early and frequently discussed stock dividend distribution was that of the new york central railroad just prior to its union with the hudson river railroad in 1869 surprisingly stock dividends were quite popular in the u s despite their being subject to federal income tax thus for example during the seven years prior to 1922 the year in which the supreme court exempted the recipients of stock dividends from taxes the ratio of stock dividends to all dividend distributions was 14 5 percent this ratio increased to a staggering forty seven percent during the seven years succeeding the supreme court decision during 1936 to 1937 some american companies distributed stock dividends to avoid the undistributed profit tax

an economic perspective on experience curves and dynamic economies in renewable energy technologies this paper analyzes dynamic economies in renewable energy technologies the paper has two contributions the first is to test the robustness of experience in solar photovoltaic solar thermal and wind energy to the addition of an explicit time trend which has been done in experience studies for other industries but not for renewable energy technologies estimation is carried out on the assumption that cumulative capacity industry production average firm production and electricity generation affect experience and thus the fall in price the second contribution is to test the impact of r d on price reduction in general cumulative experience is found to be highly statistically significant when estimated alone and highly statistically insignificant when time is added to the model the effect of r d is small and statistically significant in solar photovoltaic technology and statistically insignificant in solar thermal and wind technologies

technological learning and renewable energy costs implications for us renewable energy policy abstract this paper analyzes the relationship between current renewable energy technology costs and cumulative production research development and demonstration expenditures and other institutional influences combining the theoretical framework of learning by doing and developments in learning by searching with the fields of organizational learning and institutional economics offers a complete methodological framework to examine the underlying capital cost trajectory when developing electricity cost estimates used in energy policy planning models sensitivities of the learning rates for global wind and solar photovoltaic technologies to changes in the model parameters are tested the implications of the results indicate that institutional policy instruments play an important role for these technologies to achieve cost reductions and further market adoption

balancing demand pull and supply push measures to support renewable electricity in europe abstract increasing the share of renewable energy is deemed essential to reduce the carbon intensity of the current electricity mix the promotion of renewable energy technologies should thus be as effective and efficient as possible therefore support schemes should explicitly consider the balance between demand pull e g production subsidies and supply push efforts public rdd the cumulative pull push ratio for biogas is about 700 in the 5 year lag case and about 1200 in the other cases 10 yr lag or more although the debate on optimal rd d efforts is not conclusive and very sector specific it is relevant to compare our findings to average pull push ratios of about 20 in the engineering sector overall we can safely conclude that european governments should critically evaluate current renewables subsidy schemes and increase public rd d investments to support next waves of renewable energy technologies

earnings news and small traders an intraday analysis abstract this study separates trading volume into buyer and seller initiated activities and examines the directional volume reaction in small and large trades to different types of earnings news good bad news triggers brief but intense buying selling in the large trades however a persistent period of unusually high buying activity is observed in the small trades irrespective of the news this anomalous proclivity of small traders to buy is robust across firm size trading volume and different earnings expectation models several explanations are discussed although the behavior does not seem fully explained by existing theories

representing induced technological change in models for climate policy analysis induced technological change itc whereby the relative price effects of reducing greenhouse gas emissions stimulate innovation that mitigates the cost of abatement is both tantalizing to decision makers and challenging to represent in the computational economic and engineering models used to analyze climate change policy this overview reconciles the divergent views of technology and technological change within different types of models elucidates the theoretical underpinnings of itc introduces the reader to the techniques of their practical implementation and evaluates the implications for models results

technical change dynamics evidence from the emerging renewable energy technologies abstract this paper explores the respective contributions of the effects of learning and returns to scale in the capital costs reduction pattern experienced by renewables causality analysis and econometric estimation of learning curves are performed on two emerging renewable energy technologies namely pv and wind learning effects appear as an essential driving force a result which concurs with the widely acknowledged importance of experience in technical progress inherent to economic growth the existence of non constant and flexible returns to scale are further highlighted their effect on diffusion dynamics is shown to be potentially considerable particularly at the outset of innovation deployment however returns to scale are suggested to be constant in the long term institutional commitment in supporting innovation therefore seems justified both on the basis of the occurrence of learning effects and diseconomies of scale these findings appear to be essential to the dynamics of innovation diffusion and market structure

the association between accounting earnings and security returns for large and small firms abstract the differential information hypothesis advanced by atiase 1980 states that information production and dissemination by private parties for the purpose of identifying mispriced securities is an increasing function of firm size this study examines two corollaries of that hypothesis first security prices of large firms anticipate accounting earnings earlier than security prices of small firms second for a given level of unexpected earnings the cumulative abnormal returns of small firms exceed those of large firms the results are generally consistent with atiase s hypothesis

technological learning in energy environment economy modelling a survey abstract this paper aims at providing an overview and a critical analysis of the technological learning concept and its incorporation in energy environment economy models a special emphasis is put on surveying and discussing through the so called learning curve both studies estimating learning rates in the energy field and studies incorporating endogenous technological learning in bottom up and top down models the survey of learning rate estimations gives special attention to interpreting and explaining the sources of variability of estimated rates which is shown to be mainly inherent in r d expenditures the problem of omitted variable bias the endogeneity relationship and the role of spillovers large scale models survey show that despite some methodological and computational complexity related to the non linearity and the non convexity associated with the learning curve incorporation results of the numerous modelling experiments give several new insights with regard to the analysis of the prospects of specific technological options and their cost decrease potential bottom up models and with regard to the analysis of strategic considerations especially inherent in the innovation and energy diffusion process in particular the energy sector s endogenous responses to environment policy instruments top down models

bending the learning curve abstract the aim of this paper is to improve the application of the learning curve a popular tool used for forecasting future costs of renewable technologies in integrated assessment models iams first we formally discuss under what assumptions the traditional ols estimates of the learning curve can deliver meaningful predictions in iams we argue that the most problematic of them are the absence of any effect of technology cost on its demand reverse causality and the ability of iams to predict all determinants of cumulative capacity next we show that these assumptions can be relaxed by modifying the traditional econometric method used to estimate the learning curve the new estimation approach presented in this paper is robust to the two problems identified but preserves the reduced form character of the learning curve finally we provide new estimates of learning curves for wind turbines and pv technologies which are tailored for use in iams our results suggest that the learning rate should be revised upward for solar pv our estimate of learning rate for wind technology is almost the same as the traditional ols estimates

institutional ownership differential predisclosure precision and trading volume at announcement dates abstract this study examines the relation between ownership structure as revealed by the percentage of outstanding shares held by institutional investors and trading volume at earnings announcement dates we find that volume response as a function of institutional ownership is quadratic with the quadratic curve that reaches a maximum at around 50 institutional ownership when risk tolerances are identical across investor types such a relation is consistent with kim and verrecchia s 1991a proposition that trading volume response to public announcements increases with the level of cross investor variation in precision of private predisclosure information

transactions volume and volatility we show that the positive volatility volume relation documented by numerous researchers actually reflects the positive relation between volatility and the number of transactions thus it is the occurrence of transactions per se and not their size that generates volatility trade size has no information beyond that contained in the frequency of transactions our results suggest that theoretical research needs to entertain scenarios in which 1 both the frequency and size of trades are endogenously determined yet 2 the size of trades has no information content beyond that contained in the number of transactions article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

price and trading volume reaction surrounding earnings announcements a closer examination the process of information dissemination and interpretation in securities markets is very complex and mostly unobservable while changes in prices and the amount of trading that takes place at the market level provide evidence of information processing verrecchia 1981 demonstrated that these are not sufficient to describe completely the dissemination of information and its interpretation by investors a descriptive study of price changes and trading volume however may still provide some insights into how investors react to information this paper is an empirical investigation of price changes and trading volume during the days surrounding the announcement of quarterly and annual earnings in the wall street journal wsj in the original paper investigating trading volume and price changes surrounding earnings announcements beaver 1968 was primarily concerned with whether the annual earnings announcement had information content i e led to changes in investors assessments of the probability distribution of future returns if there were any significant price changes and or trading volume during the week of the announcement then the annual earnings announcement was assumed to have had

the impact of r d on innovation for wind energy in denmark germany and the united kingdom this paper examines the impact of public research and development r d support on cost reducing innovation for wind turbine farms in denmark germany and the united kingdom uk first we survey the literature in this field the literature indicates that in denmark r d policy has been more successful than in germany or the uk in promoting innovation of wind turbines furthermore such studies point out that subsidy induced capacity expansions were more effective in the uk and denmark in promoting cost reducing innovation than in germany the second part of the paper describes the quantitative analysis of the impact of r d and capacity expansion on innovation this is calculated using the two factor learning curve 2flc model in which investment cost reductions are explained by cumulative capacity and the r d based knowledge stock time series data were collected for the three countries and organized as a panel data set the parameters of the 2flc model were estimated focusing on the homogeneity and heterogeneity of the parameters across countries we arrived at robust estimations of a learning by doing rate of 5 4 and a learning by searching rate of 12 6 the analysis underlines the homogeneity of the learning parameters enhancing the validity of the 2flc formulation

the relation between price changes and trading volume a survey this paper reviews previous and current research on the relation between price changes and trading volume in financial markets and makes four contributions first two empiri cal relations are established volume is positively related to the magnitude of the price change and in equity markets to the price change per se second previous theoretical research on the price volume relation is summarized and critiqued and major insights are emphasized third a simple model ofthe price volume relation is proposed that is consis tent with several seemingly unrelated or contradictory observations and fourth several directions for future research are identified

market response to financial reports abstract a two date rational expectations model is analyzed at the first date traders can privately acquire a costly signal that provides imperfect information about a public report that will be issued at the second date equilibrium characterizations are provided for the fraction of traders that become informed and the informativeness of the first date price as well as the price change variance and the expected trading volume at the second date comparative statics identify how the above variables are influenced by changes in the information content of the public report and in particular how market phenomena at the public release date are influenced by endogenous prior information acquisition and trading in response to the forthcoming public release

the role of consensus and disagreement in portfolio adjustment a trading volume approach abstract this paper shows that the diffusion of opinions slows down the portfolio adjustment a variance component model of trading volumes is used to analyze nyse and s p 100 index option trading volumes

the learning curve and pricing in the chemical processing industries data on 37 chemical products are used to test a number of hypotheses about the learning curve and industrial price behavior the results document a strong and consistent learning effect learning is found to be a function of cumulated industry output and cumulated investment rather than calendar time standard economies of scale appear significant but small in magnitude relative to the learning effect variations in the slope of the learning curve are linked to differences in r d expenditures and capital intensity market concentration is found to be a strong influence on price flexibility and the timing of learningrelated price changes

technological change and the timing of mitigation measures we use a coupled carbon cycle and energy systems engineering model to analyze the future time path of carbon emissions under an illustrative co2 concentration stabilization limit of 550 ppm our findings confirm the emission pattern as found by wre global emissions rise initially pass through stabilization in order to decline in the second half of the 21st century we show that for a given co2 concentration target emission trajectories within an intertemporal optimization framework depend mainly on two factors the discount rate and the representation of technological change as either static or dynamic we obtain a similar near term emission time path as wre when using a model with static technology and a discount rate of 7 we obtain a trajectory with lower emissions in the near term when using a lower discount rate and or treating technology dynamics endogenously in the model we briefly outline a model that endogenizes technological change through learning curves we then compare differences in emission trajectories between alternative model formulations of technological change they are sufficiently small as to be of secondary importance when compared to treating co2 concentration stabilization as an inter temporal optimization problem or not whereas our results confirm the computational results of wre we arrive nonetheless at different policy conclusions if long term emission reduction is the goal we cannot follow business as usual even in the short term action needs to start now action does not necessarily mean aggressive short term emission reductions but rather enhanced r d and technology demonstration efforts that stimulate technological learning these are the necessary preconditions that long term reduction targets can be met with improved technology and at costs lower than today we close by pointing out two further critical issues uncertainty and the possible mismatch between the world of economic models and that of climate policy

toward a bias corrected currency equivalent index abstract the currency equivalent index measures the discounted economic capital stock of money producing the monetary service flow but does so under assumptions that cause downward bias we propose an extension that will correct for a significant amount of this bias

unraveling the photovoltaic technology learning curve by incorporation of input price changes and scale effects in a large number of energy models the use of learning curves for estimating technological improvements has become popular this is based on the assumption that technological development can be monitored by following cost development as a function of market size however recent data show that in some stages of photovoltaic technology pv production the market price of pv modules stabilizes even though the cumulative capacity increases this implies that no technological improvement takes place in these periods the cost predicted by the learning curve in the pv study is lower than the market one we propose that this bias results from ignoring the effects of input prices and scale effects and that incorporating the input prices and scale effects into the learning curve theory is an important issue in making cost predictions more reliable in this paper a methodology is described to incorporate the scale and input prices effect as the additional variables into the one factor learning curve which leads to the definition of the multi factor learning curve this multi factor learning curve is not only derived from economic theories but also supported by an empirical study the results clearly show that input prices and scale effects are to be included and that although market prices are stabilizing learning is still taking place