An analysis of effects of farm consolidation on total factor productivity growth in Korea

This paper aims to provide empirical evidence in support for farm consolidation being a contributor to productivity growth in Korean agriculture, using the farm-level panel data over the five years, from 1998 to 2002. Measurements are obtained from the estimation of a regression model to directly explain the effect TFP growth on farm consolidation. For empirical analysis, this study employs the generalized two-stage least squares method, which mitigates the endogeneity caused by the relationship between TFP and farm growth. The results find that farm growth leads to TFP growth. Also, the contributions of farm growth to productivity growth are both positive in rice dominant farms and non-rice dominant farms.