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Exploring Farm Investment Behaviour in Transition: The Case of Russian Agriculture

Author

Listed:
  • Raushan Bokusheva
  • Irina Bezlepkina
  • Alfons Oude Lansink

Abstract

This paper analyses the investment behaviour of Russian farms during the period of economic stabilisation that followed Russia's financial crisis of 1998, and is the first to apply the error-correction investment model to describe farms' investment behaviour in the transitional context. Additionally, the paper employs the error-correction and the adjustment-cost model to test for differences in the investment behaviour between various farm categories. The results show that in general Russian farms exhibited an error-correcting behaviour in the period under investigation. From 1999 to 2005 the output-capital gap was closed by an average rate of 10% per year. Estimates of the adjustment-cost model show that Russian farm investments are very sensitive to the sales-capital ratio, suggesting that Russian farms exhibit increasing returns to scale and positive expectations about future revenues. Yet, such farm characteristics as ownership structure, access to input markets and also regional specifics were found to be decisive for farm investment not only in the short but long term too. Finally, the results show that the adjustment-cost model is adequate for the evaluation of differences in short-term investment behaviour, whereas it is noticeably less powerful for investigating differences in the farms' long-term investment behaviour. Copyright (c) 2009 The Authors. Journal compilation (c) 2009 The Agricultural Economics Society.

Suggested Citation

  • Raushan Bokusheva & Irina Bezlepkina & Alfons Oude Lansink, 2009. "Exploring Farm Investment Behaviour in Transition: The Case of Russian Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(2), pages 436-464.
  • Handle: RePEc:bla:jageco:v:60:y:2009:i:2:p:436-464
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Curtiss, Jarmila & Ratinger, Tomáš & Medonos, Tomáš, 2012. "Ownership and Investment Behaviour in Transition Countries: A Case Study of Collective and Corporate Farms in the Czech Republic," Factor Markets Working Papers 121, Centre for European Policy Studies.
    2. Lévi, Loïc & Latruffe, Laure & Ridier, Aude, 2016. "Farm investment and performance in the French (Brittany) dairy sector," 149th Seminar, October 27-28, 2016, Rennes, France 244951, European Association of Agricultural Economists.
    3. Conradt, Sarah & Bokusheva, Raushan & Finger, Robert & Kussaiynov, Talgat, 0. "Yield Trend Estimation in the Presence of Farm Heterogeneity and Non-linear Technological Change," Quarterly Journal of International Agriculture, Humboldt-Universität zu Berlin, vol. 53.
    4. Curtiss, Jarmila & Ratinger, Tomas & Medonos, Tomas, 2012. "Ownership and Investment Behaviour in Transition Countries: A Case Study of Collective and Corporate Farms in the Czech Republic," Working Papers 122841, Factor Markets, Centre for European Policy Studies.
    5. Guna Salputra & Myrna van Leeuwen & Petra Salamon & Thomas Fellmann & Martin Banse & Oliver Ledebur, 2013. "The agri-food sector in Russia: Current situation and market outlook until 2025," JRC Working Papers JRC76915, Joint Research Centre (Seville site).

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