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Farm investment, credit rationing, and public credit policy in Poland: a microeconometric analysis

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  • Petrick, Martin

Abstract

The aim of this paper is to empirically analyse the effects of governmentally promoted credit access on the investment behaviour of credit rationed farmers. This is done by specifying an empirical investment equation which is estimated on a cross-sectional sample of Polish farm household data. In contrast to conventional neo-classical investment models, the investment equation contains the financial variable long-term credit access, which plays the central role in this study. The econometric analysis is used to analyse the determinants of credit access and estimate the marginal effect of credit on investment, which in turn provides the key information for policy evaluation. The results suggest that access to subsidised credit has a significant role in determining investment behaviour of farmers who self-classified as being exogenously credit constrained. This classification applies to 45 percent of all respondents. Major determinants of credit rationing are the reputation of the borrower and the demographic household composition. In various specifications of the creditinvestment relationship, including a cubic Tobit model, the average marginal effect of credit on investment was smaller than one. This implies that credit is partly used for other purposes than productive investment. Every second borrower invests less in productive assets than borrowed. However, over a commonly observed range, the marginal effect increases with an increasing credit volume. Even so, the investment volume is negatively related to farm size. A government policy aiming at the promotion of productive investment should hence emphasise lending in larger amounts without discriminating small farms. -- G E R M A N V E R S I O N: Zielsetzung dieses Beitrags ist die empirische Analyse der Effekte von staatlich geförderten Krediten auf die Investitionstätigkeit von kreditrationierten Landwirten. Die Analyse erfolgt mittels einer empirischen Investitionsfunktion, die auf der Basis von Querschnittsdaten landwirtschaftlicher Haushalte aus Polen geschätzt wird. Im Gegensatz zu herkömmlichen, neoklassischen Investitionsmodellen berücksichtigt die hier verwendete Investitionsgleichung auch den Zugang zu langfristigen Krediten, der die zentrale Rolle in dieser Studie spielt. Die vorgestellte ökonometrische Analyse untersucht die Bestimmungsgründe der Kreditrationierung und schätzt den marginalen Effekt des Kreditzugangs auf das Investitionsvolumen, welcher seinerseits zur Beurteilung der Wirksamkeit des staatlichen Investitionsprogramms herangezogen wird. Die Ergebnisse zeigen, dass Zugang zu subventionierten Krediten einen signifikanten Einfluss auf das Investitionsverhalten derjenigen Landwirte ausübt, die sich selbst als exogen kreditrationiert einstufen. Diese Einschätzung trifft auf 45 Prozent der Befragten zu. Wesentliche Bestimmungsgründe der Kreditrationierung sind die Reputation des Kreditnehmers sowie die demografische Zusammensetzung des Haushaltes. In verschiedenen Spezifikationen der Kredit-Investitions-Beziehung, die auch ein kubisches Tobit-Modell beinhalten, war der geschätzte marginale Krediteffekt kleiner als eins. Daraus folgt, dass die Kredite teilweise für nicht-produktive Zwecke eingesetzt wurden. Tatsächlich investiert jeder zweite Kreditnehmer weniger als er an Krediten erhält. Der marginale Effekt nimmt allerdings über einen Bereich häufig anzutreffender Kreditvolumina zu. Trotzdem besteht ein negatives Verhältnis zwischen Investitionsvolumen und Betriebsgröße. Eine auf die Förderung von produktiven Investitionen abgestellte Politik sollte daher vor allem die Vergabe von größeren Kreditvolumen unterstützen, ohne dabei kleinere Betriebe zu diskriminieren.

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Bibliographic Info

Paper provided by Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO) in its series IAMO Discussion Papers with number 43.

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Date of creation: 2002
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Handle: RePEc:zbw:iamodp:14872

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Keywords: farm investment; credit policy; Poland; microeconometrics; landwirtschaftliche Investitionen; Kreditpolitik; Polen; Mikroökonometrie;

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