Investment Activity and Ownership Structure of Czech Corporate Farms
AbstractThis paper aims at assessing the relationship between ownership structure, performance and investment activity. In particular it studies how behavioural differences between farms related to ownership structure influence farms' investment activity and thus their further development potential resulting in farm structural changes. The paper analyses a sample of corporate farms over 7 years, 1997-2003, using structural model of three equations including investment accelerator model. This model considers the effect of ownership on (a) technical efficiency as proxy for the quality of operational management, (b) returns on capital as proxy for quality of financial management, (c) investment activity, and (d) investment sensitivity to internal funds as proxy for owners/managers opposition to credit financing. The empirical results provide evidence of a theoretically justifiable positive effect of ownership concentration on investment activity and farms economic performance, and a theoretically consistent effect of external/employee ownership on technical performance. However, the authors are not able to confirm empirically the theoretically based effect of external/employee ownership on farm investment activity.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 104th Seminar, September 5-8, 2007, Budapest, Hungary with number 7826.
Date of creation: 2007
Date of revision:
corporate ownership; employee ownership; external ownership; agency problem; investment behaviour; financial constraint; Agricultural Finance; Farm Management;
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.:
- Gugler, Klaus & Mueller, Dennis C & Yurtoglu, B Burcin, 2004. "Corporate Governance and the Returns on Investment," Journal of Law and Economics, University of Chicago Press, vol. 47(2), pages 589-633, October.
- Pavel Ciaian & Tomáš Ratinger, 2009. "Income Distribution Effects of EU Rural Development Policies: The Case of Farm Investment Support," EERI Research Paper Series EERI_RP_2009_01, Economics and Econometrics Research Institute (EERI), Brussels.
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