Do the Largest Firms Grow the Fastest? The Case of U.S. Dairies
Erik O'Donoghue and
C. Shumway ()
No 9763, 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)
We analyze growth and diversification of U.S. dairy farms by examining longitudinal changes in ten size cohorts and new entrants through three successive censuses. Gibrat's law (random walk) and mean reversion hypotheses of growth are tested and rejected. Growth rates are bimodal with the largest farm cohort growing the fastest. All cohorts become more diversified over time, and smaller farms diversify most rapidly. New entrants are generally large, and they diversify more rapidly than incumbents. These data suggest that scale economies persist even for the largest cohort of dairy farms and that scale economies dominate scope economies for large farms.
Keywords: Livestock Production/Industries; Productivity Analysis (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea07:9763
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