Almuhanad Melhim Erik J. O'Donoghue C. Richard Shumway () (School of Economic Sciences, Washington State University)
Abstract
We 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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Paper provided by School of Economic Sciences, Washington State University in its series Working Papers with number
2008-7.
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