The paper examines the validity of Gibrat's law - the Law of Proportionate Effects - to Hungarian agriculture. Using a battery of specifications (OLS, FGLS, WLS, two-step Heckmann selection models, and quintile regression) and four size measures (labour, land, capital and total return), the results strongly reject Gibrat's Law for the full sample. Thus they suggest smaller farms grow faster than large. Chow-type tests reject the null of structural break between the evolution of family and corporate farms, suggesting a common growth path.
Financed by the National Centre for Research and Development under grant No. SP/I/1/77065/10 by the strategic scientific research and experimental development program:
SYNAT - “Interdisciplinary System for Interactive Scientific and Scientific-Technical Information”.