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Survival and Growth of Family Farms in a Transition Country – The Hungarian Case


  • Bakucs, Lajos Zoltan
  • Ferto, Imre


The paper investigates the validity of Gibrat’s Law in Hungarian agriculture. We use FADN data between 2001 and 2007 and employ quantile regression techniques to test the validity of Gibrat’s Law across quantiles. The Law is strongly rejected for all quantiles, providing strong evidence that smaller farms tend to grow faster than larger ones. We provide a number of socio-economic factors that can explain farm growth. Of these we found that total subsidies received by farm and far operator’s age are the most significant factors.

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  • Bakucs, Lajos Zoltan & Ferto, Imre, 2009. "Survival and Growth of Family Farms in a Transition Country – The Hungarian Case," 111th Seminar, June 26-27, 2009, Canterbury, UK 52846, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa111:52846

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    References listed on IDEAS

    1. Binswanger, Hans P. & Elgin, Miranda, 1988. "What are the Prospects for Land Reform?," 1988 Conference, August 24-31, 1988, Buenos Aires, Argentina 183168, International Association of Agricultural Economists.
    2. Verma, B N & Bromley, Daniel W, 1987. "The Political Economy of Farm Size in India: The Elusive Quest," Economic Development and Cultural Change, University of Chicago Press, vol. 35(4), pages 791-808, July.
    3. Louis Putterman & Xiao-Yuan Dong, 1997. "Pre-Reform Industry and The State Monopsony in China," William Davidson Institute Working Papers Series 94, William Davidson Institute at the University of Michigan.
    4. Deininger, Klaus & Feder, Gershon, 2001. "Land institutions and land markets," Handbook of Agricultural Economics,in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 6, pages 288-331 Elsevier.
    5. Vranken, Liesbet & Swinnen, Johan, 2006. "Land rental markets in transition: Theory and evidence from Hungary," World Development, Elsevier, vol. 34(3), pages 481-500, March.
    6. Binswanger, Hans P. & Deininger, Klaus & Feder, Gershon, 1995. "Power, distortions, revolt and reform in agricultural land relations," Handbook of Development Economics,in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 42, pages 2659-2772 Elsevier.
    7. Titman, Sheridan, 1985. "Urban Land Prices under Uncertainty," American Economic Review, American Economic Association, vol. 75(3), pages 505-514, June.
    8. Feder, Gershon, et al, 1992. "The Determinants of Farm Investment and Residential Construction in Post-Reform China," Economic Development and Cultural Change, University of Chicago Press, vol. 41(1), pages 1-26, October.
    9. Edward B. Barbier & Joanne C. Burgess, 1997. "The Economics of Tropical Forest Land Use Options," Land Economics, University of Wisconsin Press, vol. 73(2), pages 174-195.
    10. Carter, Michael R, 1984. "Identification of the Inverse Relationship between Farm Size and Productivity: An Empirical Analysis of Peasant Agricultural Production," Oxford Economic Papers, Oxford University Press, vol. 36(1), pages 131-145, March.
    11. Newell, Andrew & Pandya, Kiran & Symons, James, 1997. "Farm Size and the Intensity of Land Use in Gujarat," Oxford Economic Papers, Oxford University Press, vol. 49(2), pages 307-315, April.
    12. Williams, Joseph T, 1991. "Real Estate Development as an Option," The Journal of Real Estate Finance and Economics, Springer, vol. 4(2), pages 191-208, June.
    13. Guang Wan & Enjiang Cheng, 2001. "Effects of land fragmentation and returns to scale in the Chinese farming sector," Applied Economics, Taylor & Francis Journals, vol. 33(2), pages 183-194.
    14. Dong, Xiao-Yuan & Putterman, Louis, 2000. "Prereform Industry and State Monopsony in China," Journal of Comparative Economics, Elsevier, vol. 28(1), pages 32-60, March.
    15. Benjamin, Dwayne, 1995. "Can unobserved land quality explain the inverse productivity relationship?," Journal of Development Economics, Elsevier, vol. 46(1), pages 51-84, February.
    16. Feder, Gershon, 1985. "The relation between farm size and farm productivity : The role of family labor, supervision and credit constraints," Journal of Development Economics, Elsevier, vol. 18(2-3), pages 297-313, August.
    17. Cornia, Giovanni Andrea, 1985. "Farm size, land yields and the agricultural production function: An analysis for fifteen developing countries," World Development, Elsevier, vol. 13(4), pages 513-534, April.
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    More about this item


    Gibrat’s Law; family farm; quantile regression; transition agriculture; Community/Rural/Urban Development; Consumer/Household Economics; P32; Q12; Q19;

    JEL classification:

    • P32 - Economic Systems - - Socialist Institutions and Their Transitions - - - Collectives; Communes; Agricultural Institutions
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q19 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Other

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