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The Influence of Size on Cost Behaviour Associated with Tactical and Operational Flexibility

Estudios de Economía, Vol. 38, No. 2, pp. 419-455, December 2011

38 Pages Posted: 8 May 2012  

Josep M. Argilés‐Bosch

University of Barcelona

Josep García Blandón

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Date Written: December 1, 2011

Abstract

This paper contributes with an empirical analysis, using a sample of farms, on the influence of size on cost behaviour under operational and tactical flexibility. Results indicate that small farms behave advantageously with respect to biggest farms in situations of operational and tactical flexibility. On the one hand, the increase in indirect costs with product diversification is higher in bigger farms than in smaller. On the other hand, while most farms are flexible enough to avoid cost stickiness, the biggest face considerable rigidities in downsizing indirect costs when activity decreases.

Keywords: Agricultural economics, Tactical flexibility, Operational flexibility, Cost behaviour, Size

JEL Classification: M41, Q12, D24

Suggested Citation

Argilés‐Bosch, Josep M. and García Blandón, Josep, The Influence of Size on Cost Behaviour Associated with Tactical and Operational Flexibility (December 1, 2011). Estudios de Economía, Vol. 38, No. 2, pp. 419-455, December 2011. Available at SSRN: https://ssrn.com/abstract=2054881

Josep M. Argiles-Bosch (Contact Author)

University of Barcelona ( email )

Gran Via de les Corts Catalanes, 696
Barcelona, 08034
Spain

Josep García Blandón

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
(34-3) 542 27 32 (Phone)
(34-3) 542 17 46 (Fax)

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