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Survival And Growth Of Family Farms In Israel: 1971-1995

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  • Dolev, Yuval
  • Kimhi, Ayal

Abstract

We analyze the growth of family farms in Israeli cooperative villages between 1981 and 1995, using longitudinal data. We use instrumental variable techniques to account for the endogeneity of initial farm size, and correct for selectivity due to farm survival. Both endegeneity and sample selection are found important in this case. We find that smaller farms grow faster, so that there is convergence of farm sizes at the bottom end of the size distribution. There is weak evidence that this convergence process slows down at the upper part of the size distribution. We also find a positive effect of farm specialization on growth, indicating the possibility of scale economies. Farm capital stock affects farm survival but not growth itself, once accounting for selectivity due to survival. Farm growth is faster in larger farm households, indicating that family labor is important even when farms become more commercialized.

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Bibliographic Info

Paper provided by Hebrew University of Jerusalem, Department of Agricultural Economics and Management in its series Discussion Papers with number 7146.

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Date of creation: 2006
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Handle: RePEc:ags:huaedp:7146

Contact details of provider:
Postal: Faculty of Agriculture, Food and Environmental Quality Sciences Hebrew University of Jerusalem, P.O. Box 12, Rehovot 76100
Phone: 08-9481230
Fax: 08-9466267
Web page: http://departments.agri.huji.ac.il/economics/indexe.html
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Keywords: Farm Management;

References

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  1. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
  2. Hall, Bronwyn H, 1987. "The Relationship between Firm Size and Firm Growth in the U.S. Manufacturing Sector," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 583-606, June.
  3. Avner Ahituv & Ayal Kimhi, 2006. "Simultaneous estimation of work choices and the level of farm activity using panel data," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 33(1), pages 49-71, March.
  4. Kostov, Philip & Patton, Myles & Moss, Joan & McErlean, Seamus, 2006. "Does Gibrat’s law hold amongst dairy farmers in Northern Ireland?," MPRA Paper 3370, University Library of Munich, Germany.
  5. Kimhi, Ayal & Bollman, Ray, 1999. "Family farm dynamics in Canada and Israel: the case of farm exits," Agricultural Economics, Blackwell, vol. 21(1), pages 69-79, August.
  6. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  7. Kislev, Yoav & Leerman, Zvi & Zusman, Pinhas, 1991. "Recent Experience with Cooperative Farm Credit in Israel," Economic Development and Cultural Change, University of Chicago Press, vol. 39(4), pages 773-89, July.
  8. Chavas, Jean-Paul, 2001. "Structural change in agricultural production: Economics, technology and policy," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 5, pages 263-285 Elsevier.
  9. Christoph R. Weiss, 1999. "Farm Growth and Survival: Econometric Evidence for Individual Farms in Upper Austria," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 103-116.
  10. Evans, David S, 1987. "Tests of Alternative Theories of Firm Growth," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 657-74, August.
  11. Lund, Philip J., 2005. "Aspects of the Definition and Classification of Farms," 94th Seminar, April 9-10, 2005, Ashford, UK 24417, European Association of Agricultural Economists.
  12. Ahituv, Avner & Kimhi, Ayal, 2002. "Off-farm work and capital accumulation decisions of farmers over the life-cycle: the role of heterogeneity and state dependence," Journal of Development Economics, Elsevier, vol. 68(2), pages 329-353, August.
  13. Kimhi, Ayal & Rekah, Hila, 2005. "The Simultaneous Evolution Of Farm Size And Specialization: Dynamic Panel Data Evidence From Israeli Farm Communities," Discussion Papers 7170, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
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