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Financing availability and investment decisions of Slovenian farms during the transition to a market economy

Author

Listed:
  • Štefan Bojnec

    (University of Primorska)

  • Laure Latruffe

    (INRA Rennes)

Abstract

This paper investigates the financial determinants of investment decisions made by Slovenian family farms during the transition to a market economy in the period 1994-2003. Results from standard and augmented accelerator models indicate that farms’ investment decisions were based on market opportunities during this period, ruling out the presence of soft budget constraints, but that these decisions were constrained by the availability of finance. Further analyses reveal a non-significant impact of investment subsidies received by farms, but a positive impact of operational subsidies for small farms only, on the alleviation of financial constraints.

Suggested Citation

  • Štefan Bojnec & Laure Latruffe, 2011. "Financing availability and investment decisions of Slovenian farms during the transition to a market economy," Journal of Applied Economics, Universidad del CEMA, vol. 14, pages 297-317, November.
    • Handle: RePEc:cem:jaecon:v:14:y:2011:n:2:p:297-317
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    File URL: https://ucema.edu.ar/publicaciones/download/volume14/bojnec.pdf
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    Citations

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    Cited by:

    1. Ioana Moldovan (Tonea) & Ioana Beleiu, 2020. "An Analysis of Investment Decisions in Agribusiness," Book chapters-LUMEN Proceedings, in: Carmen NÄ‚STASE (ed.), 16th Economic International Conference NCOE 4.0 2020, edition 1, volume 13, chapter 18, pages 194-205, Editura Lumen.
    2. Geoffroy Enjolras & Gilles Sanfilippo, 2018. "The role of debt in financing French farm investments," Post-Print hal-02048362, HAL.
    3. Enjolras, Geoffroy & Sanfilippo, Gilles, 2019. "La structure du capital des exploitations agricoles françaises," Économie rurale, French Society of Rural Economics (SFER Société Française d'Economie Rurale), vol. 369(July-Sept).
    4. Czubak, Wawrzyniec & Pawłowski, Krzysztof Piotr & Sadowski, Arkadiusz, 2021. "Outcomes of farm investment in Central and Eastern Europe: The role of financial public support and investment scale," Land Use Policy, Elsevier, vol. 108(C).
    5. Marie PECHROVÁ, 2015. "Impact of the Rural Development Programme Subsidies on the farms' inefficiency and efficiency," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 61(5), pages 197-204.
    6. Agnieszka Brelik & Barbara Golebiewska & Justyna Franc-Dabrowska, 2020. "Co-Financing of Organic Farming in the EU: Necessity or Fantasy?," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 547-557.
    7. Alenka VOLK & Štefan BOJNEC, 2014. "Local action groups and the LEADER co-financing of rural development projects in Slovenia," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 60(8), pages 364-375.
    8. Loic Levi & Obafemi Philippe Koutchade & Laure Latruffe & Aude Ridier, 2018. "Spatial effects in investment decisions: Evidence from French dairy farms," Post-Print hal-02024077, HAL.
    9. Snežana Radukić & Milan Marković & Milica Radović, 2015. "The Effect of Food Prices on Inflation in the Republic of Serbia," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 4(2), pages 23-36.
    10. Angelova, Biljana & Bojnec, Štefan, 2011. "Developments in the Agricultural and Rural Capital Market of the Former Yugoslav Republic of Macedonia," Factor Markets Working Papers 110, Centre for European Policy Studies.
    11. Bojnec, Stefan, 2011. "Agricultural and Rural Capital Markets in the EU Candidate Countries: Croatia, the Former Yugoslav Republic of Macedonia and Turkey," Working papers 117489, Factor Markets, Centre for European Policy Studies.
    12. Femenia, Fabienne & Latruffe, Laure & Chavas, Jean-Paul, 2017. "Responsiveness of farm investment to price changes: An empirical study of the French crop sector," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261421, European Association of Agricultural Economists.
    13. Štefan BOJNEC, 2012. "Agricultural and rural capital markets in Turkey, Croatia and the FYR of Macedonia," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 58(11), pages 533-541.

    More about this item

    Keywords

    farms; investment; accelerator model; financial constraints; soft budget constraint; subsidies; Slovenia;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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