Original scientific paper

https://doi.org/10.1080/1331677X.2020.1722722

Testing the validity of Gibrat’s law for Slovenian farms: cross-sectional dependence and unit root tests

Štefan Bojnec orcid.org/0000-0002-1270-6372
Imre Fertő

Abstract

This paper studies the validity of Gibrat’s law for the growth of
Slovenian farms between 2007 and 2015 using Farm Accountancy
Data Network datasets. Cross-sectional dependence test and four
different groups of panel unit root tests are applied to study the
relationship between farm size and the farm size growth. It
revealed evidence of cross-sectional dependence in farm sizes.
Both input (land and labour) and output (economic) sizes of variables
as proxy for the measures of farm size are applied. The
results suggest that Gibrat’s law is valid for Slovenian farms independently
from the measures of farm size and types of panel unit
root tests. Slovenian smaller farms are not growing faster than
larger ones and thus all farm sizes tend to contribute to an
increase in average farm size in generally relatively small- to
medium-size farm structures.

Keywords

Gibrat’s law; farm size; farm growth; Farm Accountancy Data Network; Slovenia

Hrčak ID:

254450

URI

https://hrcak.srce.hr/254450

Publication date:

9.2.2021.

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