Value Of Social Capital To Mid-Sized Northern Plains Farms
AbstractAs farms increase in size, operators face the decision of remaining loyal to local merchants or obtaining volume discounts from distant input suppliers. When farmers bypass local merchants and buy inputs in volume, they often realize price discounts but forego many services including credit forebearance. When farmers buy locally, they pay higher prices, which decreases profits and increases financial risk, but generates social capital which can be drawn upon during periods of economic adversity. A theoretical model of farm financial risk evaluates borrower behavior in light of cash flow constraints, volume discounts, and social capital. Results delineate financial risks involved and value of social capital.
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Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2005 Annual meeting, July 24-27, Providence, RI with number 19169.
Date of creation: 2005
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Capital; financial risk; simulation; social; stochastic; Agricultural Finance;
Other versions of this item:
- Gustafson, Cole R., 2004. "Value Of Social Capital To Mid-Sized Northern Plains Farms," Statistical Series Reports 23677, North Dakota State University, Department of Agribusiness and Applied Economics.
- Gustafson, Cole R., 2004. "Value Of Social Capital To Mid-Sized Northern Plains Farms," Staff Papers 23677, North Dakota State University, Department of Agribusiness and Applied Economics.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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