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Financial Risk in Hungarian Agro-Food Economy

Author

Listed:
  • Jozsef Fogarasi

    (Research Institute of Agricultural Economics, Hungary)

  • Csaba Doman

    (Research Institute of Agricultural Economics, Hungary)

  • Ibolya Lamfalusi

    (Research Institute of Agricultural Economics, Hungary)

  • Gabor Kemeny

    (Research Institute of Agricultural Economics, Hungary)

Abstract

This paper aims to investigate the financial risk in Hungarian agricultural and food production to shed light to which extent are exposed to risk these two sub-sectors of the food value chain. The exposure to risks is varying in different sub-sectors of the agriculture and food industry. The last financial and economic crisis revealed that the risks play a more important role in production decisions and production performance than is considered in the literature. The examination of financial risk is based on theoretical and empirical literature published by Morgen et al. (2012), Chambers and Quiggin (2004), Shankar (2012). The exposure of agricultural producers to financial risk is investigated by using a complete Disclosure Statement database of National Tax and Customs Administration (NAV) containing records of all Hungarian agricultural and food industry enterprises. The calculations of Mean Absolute Deviations, semi-variance and variance indicators reveal a higher exposure to financial risk of Hungarian food producers comparative to agricultural producers. We observed a decreasing exposure to risk after EU accession in both agriculture and food industry.

Suggested Citation

  • Jozsef Fogarasi & Csaba Doman & Ibolya Lamfalusi & Gabor Kemeny, 2015. "Financial Risk in Hungarian Agro-Food Economy," MIC 2015: Managing Sustainable Growth; Proceedings of the Joint International Conference, Portorož, Slovenia, 28–30 May 2015,, University of Primorska, Faculty of Management Koper.
    • Handle: RePEc:mgt:micp15:453-459
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    References listed on IDEAS

    as
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    3. World Bank, 2005. "Managing Agricultural Production Risk : Innovations in Developing Countries," World Bank Publications - Reports 8797, The World Bank Group.
    4. B. L. Gardner & G. C. Rausser (ed.), 2001. "Handbook of Agricultural Economics," Handbook of Agricultural Economics, Elsevier, edition 1, volume 1, number 1.
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    7. Allen M. Featherstone & Charles B. Moss & Timothy G. Baker & Paul V. Preckel, 1988. "The Theoretical Effects of Farm Policies on Optimal Leverage and the Probability of Equity Losses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(3), pages 572-579.
    8. World Bank, 2005. "Managing Agricultural Production Risk : Innovations in Developing Countries," World Bank Publications - Reports 14434, The World Bank Group.
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