specific effects have a larger impact than rayon endowments throughout (e.g. means are 0.12 vs. 0.06 for all and 0.17 vs. 0.09 for permanent entrants and medians 0.13 vs. 0.10 and 0.16 vs. 0.12, respectively). In other words, entrants on average increased production by 12 or 17 percentage points, above the mean fixed effect of 0.08% for the above 5,000 ha farm size group.

# **4.2 Structural determinants of entry, exit, and productivity change**

The apparent importance of entry and exit warrants analysis of the extent to which these processes are driven by structural determinants beyond the individual farm. To explore this, we conduct analysis at the rayon level using the 470 agricultural rayons (excluding towns) to explore if initial land concentration affects subsequent structural change by estimating: where _Xit_ or _Yit_ is the share of the agriculturally cultivated area that was released from production through exit or occupied by new entrants in rayon _i_ at time _t_ . Entry or exit may be ‘permanent’, i.e. between the endpoints of our sample, or temporary.<sup>22</sup> As our main interest is to find out whether, after controlling for endowments and initial productivity of large and small farms, the level of entry and exit was affected by initial large farm presence, we include as other controls _Si_ , the share of area in rayon _i_ initially cultivated by farms above 5,000 or 3,000 ha, _FFi_ , and _Fi_ , the mean levels of rayon _i_ ’s initial productivity for all farmers and farms with more than 5,000 and 3,000 ha, respectively as proxied by the fixed effect from the production function, and _RFi_ the rayon-level fixed effect to control for differences in productive endowments. The initial period is 2001/02 and annual regressions also include year dummies ( _Dt_ ).

Descriptive statistics for the relevant variables are displayed in table 6. With national initial cultivated area of 19.06 mn. ha, the average rayon had an area of somewhat above 400 km<sup>2</sup> of which 36% and 13% were initially occupied by farms greater than 3,000 or 5,000 ha. This aggregate conceals variation across regions: in the East and the South, more than 60% and 25% of land were under farms greater than 3,000 and 5,000 ha, respectively, compared to less than 10% and 2% in the West and 33% and 10% in the North. Except in the West (-0.15). Initial efficiency levels were closer, with between -0.08 and -0.1 for all regions. In fact, inter-regional differences in initial efficiency were more pronounced between farm size groups: farms above 5,000 ha were most productive in the West (0.04 compared to -0.03 for farms above 3,000 ha) and least productive in the East (-0.09 or -0.08). There are also differences between initial rayon-level fixed effects with the West having the least (-0.24) and East and South (0.10 and 0.11) the most favorable endowments (see figure 5 for a rayon productivity map).

> 22 Permanent entrants are those who entered the sample after 2001 and were present in 2011 whereas ‘permanent exiters’ are defined as those present in 2001 who had exited by 2011. Temporary entrants and exiters include those who entered after 2001 but exited before 2011.

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