A multiplicative competitive interaction model to explain structural change along farm specialisation, size and exit/entry using Norwegian farm census data

In this paper we analyse the drivers of farm structural change with respect to farm specialisation, size and exit in Norway using an adapted Multiplicative Competitive Interaction (MCI) model recently presented in the field of agriculture. We use Norwegian single farm full census data for the period 1996-2015. Four production specialisations and seven size classes represent farm groups, as well as a residual and an exit farm group at regional level. The estimates indicate that initial state (path dependency) explains about 87% of Norwegian farm structural change followed by natural conditions (6.4%) and subsidies (4.9%). The results suggest a more rigid farm structure in Norway which is also apparent in the old EU Member States. Further it can be seen that the exit farm group shows a different explanatory pattern of the determinants than the other active farm groups.



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