Abstract：This study aimed to analyze the economic structure of Taiwan's cycling industry by applying a cost function. We employed economic methods to examine panel data published by the Taiwan Economic Journal (TEJ) and a seemingly unrelated regressions (SUR) model to identify differences in the cost structures among three Taiwanese cycling companies. Further, we tested for the more suitable cost function. Then, based on the results, we estimated the economies of scale for Taiwan's cycling industry. The results indicated that the differences in the cost structure among the three cycling companies are non-significant. In other words, a translog model cost function should be used to calculate the economies of scale for Taiwan's cycling industry. We conclude that Taiwan's cycling industry has diseconomies of scale, which can be attributed to the complexity of the product line and the constantly widening industry scale. This will not only gradually eliminate the companies' internal resources but also render them unable to attain the optimal distribution of resources and offset the supposed benefits. (Full text)