This paper analyses the impact of a tradable production quota on firm entry and exit in the agricultural industry. We develop a dynamic stochastic equilibrium framework considering that a release of production capacity by exiting firms affects the investment options for entrants. Firms'...

In this article, we simulate the concentration process within the German dairy sector employing a sectorwide optimization model. As a result, we get cost minimizing structures of the dairy sector for various time horizons depending on varying levels of transportation costs. We show that the...