Flexibility and firm size - Empirical evidence for the agricultural sector

This paper reports evidence on the relationship between firm size and flexibility for a sample of more than 40 000 farm households in Upper-Austria for the period 1980 to 1990. Our finding of a significant negative impact of size on both, the flexibility in adjusting aggregate output to exogenous shocks (''tactical flexibility'') as well as the ability to switch quickly and cheaply between products (''operational flexibility'') supports the idea, that large and small farms each have their own efficiency niches. In addition, we also find full-time farms operated by younger, better educated farm operators to be more flexible, ceteris paribus.