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Investment, and Contract Hold-Ups in Transition: Evidence from Hungary

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  • Gow, Hamish R.
  • Swinnen, Johan F.M.

Abstract

This paper analyses empirically the effect of "hold-ups" on capital investment in farms using a sample of 318 Hungarian enterprises, surveyed over 1997. A negative relationship arises between capital investment and the incidence of hold-up behaviour. This relationship is affected by farm's wealth and liquidity position, the quality of legal enforcement of contracts, by whether farms have contracted sales to foreign processors, and whether they are established as successors to pre-reform organisations rather than start-up businesses.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 2002 International Congress, August 28-31, 2002, Zaragoza, Spain with number 24853.

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Date of creation: 2002
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Handle: RePEc:ags:eaae02:24853

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Related research

Keywords: contracting; hold-ups; firm investment; transition; Agricultural Finance;

References

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  17. Gow, Hamish R. & Streeter, Deborah H. & Swinnen, Johan F. M., 2000. "How private contract enforcement mechanisms can succeed where public institutions fail: the case of Juhocukor a.s," Agricultural Economics, Blackwell, vol. 23(3), pages 253-265, September.
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