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Dynamic Measures of Scope and Scale Economies: An Application to German Agriculture
Author(s) -
FernandezCornejo J.,
Gempesaw C. M.,
Elterich J. G.,
Stefanou S. E.
Publication year - 1992
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1242487
Subject(s) - scope (computer science) , economies of scope , german , economies of scale , economics , scale (ratio) , production (economics) , agriculture , shadow (psychology) , production theory , industrial organization , microeconomics , computer science , ecology , psychology , physics , archaeology , quantum mechanics , biology , psychotherapist , history , programming language
Abstract Static concepts of multiproduct economies of scale and scope are extended into a dynamic setting within the cost of adjustment framework. Important properties of the dynamic measures are developed and the foundations of a dynamic theory of the firm generalizing static neoclassical theory are presented. Dynamic measures of scope and scale as well as shadow costs are estimated empirically for multiple‐output, multiple‐input German dairy farms operating under a production quota. Causes of scope economies are explored and a conceptual model to predict the evolution of the production structure of German farms is formulated.