Investment and Financial Constraints in European Agriculture: Evidence from France, Hungary and Slovenia
AbstractThe article investigates the investment and financial constraints for French, Hungarian and Slovenian farms using FADN panel data with different econometric estimation approaches. Farm gross investment is positively associated with real sales growth and cash flow implying the absence of soft budget constraint. Gross farm investment is positively associated with investment subsidies. Specific results by country are found depending on farm indebtedness. Investment subsidies can mitigate some capital market imperfections in short-term, while on long-term what is crucial is farm sale ability to successfully compete in the output market gaining sufficient cash flow for farm competitive survival and investment.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 114357.
Date of creation: 2011
Date of revision:
farm investment; soft budget constraint; investment subsidy; panel data analysis; Agricultural Finance; D81; D92; O12; Q12; C23;
Other versions of this item:
- Imre Ferto & Zoltan Bakucs & Stefan Bojnec & Laure Latruffe, 2012. "Investment and Financial Constraints in European Agriculture: Evidence from France, Hungary and Slovenia," IEHAS Discussion Papers 1213, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D92 - Microeconomics - - Intertemporal Choice - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
This paper has been announced in the following NEP Reports:
- NEP-AGR-2011-10-15 (Agricultural Economics)
- NEP-ALL-2011-10-15 (All new papers)
- NEP-TRA-2011-10-15 (Transition Economics)
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