Panel data analysis in Specialization, diversification, and productivity: a case study of rice farms in Korea

Elaine Cable


With an case application of a rice orm in Korea, this article examines the microeconomics of productivity associated with specialization/diversification in production activities. Due to the reason tat Korean rice farms are generally small and highly specialized. We conduct the analysis highly relying on farm‐level panel data, the analysis studies farm productivity in a multi‐input multi‐output context. We conclude that positive but small productivity gains from farm diversification which are mostly from complementarity effects across farm outputs, with minimal effect of scale economies. Results indicate that positive complementarity effects work against nonconvexity effects, which provide strong productivity incentives for rice farms to specialize.


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