Do the Largest Firms Grow and Diversify the Fastest? The Case of U.S. Dairies
AbstractWe analyze growth and diversification of U.S. dairy farms by examining changes in ten size cohorts and new entrants through three successive censuses. We reject Gibrat’s law and the mean reversion hypothesis of growth. Growth rates appear bimodal where the smallest and largest farm cohorts grow fastest. All cohorts diversify but the largest farms do not diversify as rapidly as medium-sized farms. New entrants are generally large, and they diversify more rapidly than comparably-sized incumbents. These data suggest that scale economies persist even for the largest cohort of U.S. dairy farms and scale economies dominate scope economies for large farms.
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Bibliographic InfoPaper provided by School of Economic Sciences, Washington State University in its series Working Papers with number 2008-7.
Length: 33 pages
Date of creation: Jul 2008
Date of revision:
: census; dairy; diversification; growth; scale; scope;
Other versions of this item:
- Almuhanad Melhim & Erik J. O'Donoghue & C. Richard Shumway, 2009. "Do the Largest Firms Grow and Diversify the Fastest? The Case of U.S. Dairies," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(2), pages 284-302, 06.
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
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