Synthesis Report on the Impact of Capital Use
AbstractThis paper examines the drivers of productivity in EU agriculture from a factor markets perspective. Using econometrically estimated production elasticities and shadow prices of factors for a set of eight EU member states, we focus on field crop farms represented in the FADN database for the years 2002-08. As it turned out that output reacts most elastically to materials input, we investigate this factor further and find different rationing regimes represented in different member states. Marginal return on materials is low in Denmark and West Germany, but significantly above typical market interest rates in East Germany, Italy and Spain. In the latter countries and in Denmark it also increased towards the end of the observed period. This finding is consistent with a perception of tightening funding access, possibly induced or reinforced by the unfolding financial crisis. Marginal returns to land, labour and fixed capital are generally low. We conclude that the functioning of factor markets plays a crucial role for productivity growth, but that factor market operations display considerable heterogeneity across EU member states.
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Bibliographic InfoPaper provided by Centre for European Policy Studies in its series Factor Markets Working Papers with number 169.
Length: 17 pages
Date of creation: Aug 2013
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-AGR-2013-10-11 (Agricultural Economics)
- NEP-ALL-2013-10-11 (All new papers)
- NEP-EFF-2013-10-11 (Efficiency & Productivity)
- NEP-EUR-2013-10-11 (Microeconomic European Issues)
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