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Growth dynamics of dairy processing firms in the European Union
Article first published online: 26 APR 2010
© 2010 International Association of Agricultural Economists
Volume 41, Issue 3-4, pages 285–291, May / July 2010
How to Cite
Gardebroek, C., Turi, K. N. and Wijnands, J. H.M. (2010), Growth dynamics of dairy processing firms in the European Union. Agricultural Economics, 41: 285–291. doi: 10.1111/j.1574-0862.2010.00447.x
- Issue published online: 26 APR 2010
- Article first published online: 26 APR 2010
- Received 9 November 2009; received in revised form 1 February 2010; accepted 15 February 2010
- EU dairy processing industry;
- Dynamic panel data;
- Firm growth
The structure of the dairy processing industry in the European Union has changed enormously in recent decades. In many countries, the industry is characterized by a few large companies with a big market share accompanied by many small processors that often produce for niche markets. This article investigates which factors relate to growth of dairy processing firms. Using a unique 10-year panel data set and recently developed dynamic panel data estimators, the growth process of dairy processors is investigated for six rather diverse European countries. The data structure and the estimation method allow for dealing with endogeneity issues in an appropriate way. Firm size growth measured in total assets is found to be affected by firm size, firm age, and financial variables. Growth in number of employees is only affected by firm age and lagged labor productivity. Implications for these results are given in the final section of the article.