동태적 범위의 경제에 관한 연구

Dynamic Economies of Scope for Farm Diversification Strategy

This paper introduces the concept of dynamic economies of scope to account for farmers’ inter-temporal diversification strategy. Using the Bellman equation with a normalized quadratic (NQ) value function, we devise an index measuring scope economies with the consideration of dynamic adjustment cost. For this study, we apply dynamic programming to the case of Korean farmers producing multi-outputs of agricultural, livestock, and other products. The index titled as dynamic economies of scope (DES) is calculated via NQ value functions with parameters of conditional factor demand functions estimated by nonlinear three-stage least squares (NL3SLS). Results show that there exist dynamic scope economies. Farmers with more specialized skills or larger scale land tend to prefer specification strategy than diversification strategy.