Farm Capital Structure Choice under Credit Constraint: Theory and Application
AbstractThis study proposed a theoretical framework for analyzing farm capital structure choice. The theoretical model recognizes that the costs of debt are endogenously determined which in turn reflect the degree of credit constraint faced by individual borrowers. Based on the proposed model, we derived the impacts of different determinants on capital structure choice analytically. The theoretical inferences are further tested with empirical data. Methodologically, we proposed a fixed-effect quantile regression procedure to estimate the impacts of determinants at different ranges of leverage. The effects of determinants are discussed in the empirical application.
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Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida with number 6130.
Date of creation: 2008
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Capital Structure; Cost of Debt; Credit Constraint; Quantile Regression; Agricultural Finance;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-18 (All new papers)
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