Financial constraints and nonlinearity of farm size growth

Purpose This article aims to investigate the financial constraints and nonlinearity of farm size growth. Design/methodology/approach Farm growth is measured with land, labor output using data from Accountancy Data Network (FADN) for Hungary Slovenia. A dynamic panel model applied assess Findings Results show that, except land in Slovenia Hungary, liquidity are less important than endogenous factors based on expectations steady restructuring. Smaller farms growing faster larger ones. The hypothesis that a higher level subsidies would increase not supported Hungary. When reach certain size, area largest increases. debts linked Research limitations/implications Further research impact can be conducted at disaggregate farm-type examine whether there variability underlying interlinkages specialization level. Practical implications implication dependent initial smaller bigger ones indicates it necessary favor fastest thus supports application non-discriminatory policy observing structural changes. Originality/value econometric incorporates cash flow as measure provides insight into cross-country comparison relation potential constraints, debt which information relevance makers practitioners.