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
Publication date:
9.2.2021.
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