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The Impacts of Farm Financial Structure on Production Efficiency

Author

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  • Lambert, David K.
  • Bayda, Volodymyr V.

Abstract

Farm financial structure may affect both short- and long-run input usage, thereby affecting farm efficiency. Any inefficiencies arising from the choice of inputs can be magnified over time as credit constraints continue to affect input usage. In a panel of 54 North Dakota crop farms, efficiency and debt structure were related. Intermediate debt was found to be positively related to farm technical efficiency, and short-term debt was negatively associated with technical efficiency. Use of intermediate-term debt was positively associated with farm-scale efficiency, whereas no significant relationship was found between short- and long-term debt and scale efficiency.

Suggested Citation

  • Lambert, David K. & Bayda, Volodymyr V., 2005. "The Impacts of Farm Financial Structure on Production Efficiency," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 37(1), pages 277-289, April.
    • Handle: RePEc:cup:jagaec:v:37:y:2005:i:01:p:277-289_00
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    Cited by:

    1. West, Steele, 2021. "The Estimation of Farm Business Inefficiency in the Presence of Debt Repayment," 2021 Conference, August 17-31, 2021, Virtual 315048, International Association of Agricultural Economists.
    2. Stefani, Gianluca & Gadanakis, Yiorgos & Lombardi, Ginevra Virginia & Tiberti, Marco, "undated". "The impact of financial leverage on farms capacity to react in market shocks," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261156, European Association of Agricultural Economists.
    3. Kuhle Prudence Mnisi & Abdul Latif Alhassan, 2021. "Financial structure and cooperative efficiency: A pecking‐order evidence from sugarcane farmers in Eswatini," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 92(2), pages 261-281, June.
    4. Geraldo Souza & Eliane Gonçalves Gomes & Eliseu Roberto Alves, 2022. "Two-part fractional regression model with conditional FDH responses: an application to Brazilian agriculture," Annals of Operations Research, Springer, vol. 314(2), pages 393-409, July.
    5. Steele C. West & Amin W. Mugera & Ross S. Kingwell, 2024. "The impact of repayment obligations arising as a by‐product of input use on partial inefficiency: Evidence from Western Australian farm businesses," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 68(3), pages 678-700, July.
    6. Tiberti, Marco & Stefani, Gianluca & Lombardi, Ginevra, 2016. "Efficiency and Capital Structure in the Italian Cereal Sector," 2016 International European Forum (151st EAAE Seminar), February 15-19, 2016, Innsbruck-Igls, Austria 244539, International European Forum on System Dynamics and Innovation in Food Networks.
    7. Minviel, Jean Joseph & Latruffe, Laure, 2014. "Meta-regression analysis of the impact of agricultural subsidies on farm technical efficiency," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182767, European Association of Agricultural Economists.
    8. László Szőllősi & Adél Dorottya Erdős, 2023. "Income and Asset Situation of Companies Producing Arable Crops in the Visegrad Countries," Agriculture, MDPI, vol. 13(8), pages 1-20, August.
    9. Sabasi, Darlington & Kompaniyets, Lyudmyla, "undated". "Impact of credit constraints on profitability and productivity in U.S. agriculture," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205689, Agricultural and Applied Economics Association.
    10. Pieralli, Simone & Hüttel, Silke & Odening, Martin, 2014. "Abandonment of milk production under uncertainty and inefficiency: The case of West German farms," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170236, Agricultural and Applied Economics Association.

    More about this item

    JEL classification:

    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

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