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Market Integration of Household Plots in Ukraine - The Impact of Social Capital

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  • Wolz, Axel
  • Fritzsch, Jana
  • Buchenrieder, Gertrud
  • Nedoborovskyy, Andriy

Abstract

Following the two rounds of land reform in Ukraine since independence, household plot farmers emerged as the major suppliers to agricultural production. But they form a very heterogeneous group. Not all of them are equally successful, economically, and integrated to markets. In general, a varying adoption of production factors is identified as being of influence. In this paper, we argue that social capital is an additional factor contributing to higher agricultural incomes. We tested our thesis using primary evidence from a survey in Ukraine among 255 household plot farmers in 2006. Based on 24 social capital indicators we deduced four separate index variables linking the social capital dimension of form, i.e. structural and cognitive, with the social capital dimension of relationship, i.e. bonding and bridging. By adopting multiple regression analysis we show that social capital of its bridging structural type is indeed a significant factor determining the level of agricultural income. However, the findings also underline the multidimensional side of social capital. Both bonding and cognitive social capital have no impact on agricultural income. We conclude that social capital can be identified as a significant production factor but its underlying indicators do not seem to point to the same direction and have to be analysed in their specific contexts.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 2008 International Congress, August 26-29, 2008, Ghent, Belgium with number 43842.

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Date of creation: 2008
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Handle: RePEc:ags:eaae08:43842

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Keywords: production factors; social capital; Ukraine; Labor and Human Capital;

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  1. Winters, Paul C. & Davis, Benjamin & Corral, Leonardo, 2001. "Assets, Activities and Income Generation in Rural Mexico: Factoring in Social and Public Capital," Working Papers 12898, University of New England, School of Economics.
  2. Steven N. Durlauf & Marcel Fafchamps, 2004. "Social Capital," NBER Working Papers 10485, National Bureau of Economic Research, Inc.
    • Durlauf, Steven N. & Fafchamps, Marcel, 2005. "Social Capital," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 26, pages 1639-1699 Elsevier.
  3. Stephan J. Goetz & Anil Rupasingha, 2006. "Wal-Mart and Social Capital," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(5), pages 1304-1310.
  4. S. Illeris & G. Akehurst, 2002. "Introduction," The Service Industries Journal, Taylor & Francis Journals, vol. 22(1), pages 1-3, January.
  5. Fabio Sabatini, 2005. "The Role of Social Capital in Economic Development. Investigating the Causal Nexus through Structural Equations Models," Development and Comp Systems 0512010, EconWPA.
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