The Impact of Management on Farm Expansion and Survival

Wesley Musser and Fred C. White

Journal of Agricultural and Applied Economics, 1975, vol. 7, issue 1, 63-69

Abstract: Commercial agriculture is undergoing a major structural change in the form of decreasing numbers and increasing sizes of farm units. This structural change results in farm firms constantly experiencing expansion and survival problems. In some cases, expansion and survival are related: growth in size is necessary to incorporate cost-reducing technological improvements to maintain income levels. In others, these problems are separated: expansion is desired to increase income-earning capacity, or survival may be a primary objective for the firm when expansion is unlikely. This paper develops an analytical framework, incorporating the dynamics of expansion and survival, and explores their interrelationships. Stochastic relationships are incorporated for use in conceptualizing simulation studies of firm growth. Its empirical relevance is demonstrated with an analysis of the interaction between managerial ability and leverage in the process of expansion and survival of a representative farm firm in South Central Georgia.

Date: 1975
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jagaec:v:7:y:1975:i:01:p:63-69_01

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