Do the Largest Firms Grow and Diversify the Fastest? The Case of U.S. Dairies
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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- Kostov, Philip & Patton, Myles & Moss, Joan E. & McErlean, Seamus, 2005.
"Does Gibrat's Law Hold Amongst Dairy Farmers in Northern Ireland?,"
2005 International Congress, August 23-27, 2005, Copenhagen, Denmark
24775, European Association of Agricultural Economists.
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- P. A. Geroski, 2005. "Understanding the implications of empirical work on corporate growth rates," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 129-138.
- Daniel A. Summer & Christopher A. Wolf, 2002. "Diversification, Vertical Integration, and the Regional Pattern of Dairy Farm Size," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 24(2), pages 442-457.
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