IDEAS home Printed from https://ideas.repec.org/a/oup/erevae/v36y2009i1p103-120.html

Investment rigidity and policy measures

Author

Listed:
  • Teresa Serra
  • Spiro Stefanou
  • José M. Gil
  • Allen Featherstone

Abstract

This paper assesses the impacts of decoupled government transfers on production decisions of a sample of Kansas farms. Our empirical analysis is based on a reduced-form application of the dual model of investment under uncertainty developed by Sckokai, which is extended to a consideration of irregularities in the capital stock adjustment cost function. To do so we adopt the threshold regression methods proposed by Hansen. The econometric results support the existence of three regimes characterised by different economic behaviour. Our analysis suggests that in a dynamic setting that allows for irregularities in the capital adjustment cost function, decoupled transfers can have a powerful influence on production decisions. The dynamics of the stock of capital cause this influence to grow over time. Oxford University Press and Foundation for the European Review of Agricultural Economics 2009; all rights reserved. For permissions, please email journals.permissions@oxfordjournals.org, Oxford University Press.

Suggested Citation

  • Teresa Serra & Spiro Stefanou & José M. Gil & Allen Featherstone, 2009. "Investment rigidity and policy measures," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 36(1), pages 103-120, March.
    • Handle: RePEc:oup:erevae:v:36:y:2009:i:1:p:103-120
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/erae/jbp010
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fabienne Femenia & Laure Latruffe & Jean-Paul Chavas, 2021. "Responsiveness of farm investment to price changes: evidence from the French crop sector," Applied Economics, Taylor & Francis Journals, vol. 53(34), pages 3972-3983, July.
    2. Supawat Rungsuriyawiboon & Heinrich Hockmann, 2015. "Adjustment costs and efficiency in Polish agriculture: a dynamic efficiency approach," Journal of Productivity Analysis, Springer, vol. 44(1), pages 51-68, August.
    3. Viaggi, Davide & Raggi, Meri & Gomez y Paloma, Sergio, 2011. "Farm-household investment behaviour and the CAP decoupling: Methodological issues in assessing policy impacts," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 127-145, January.
    4. Dakpo, K Hervé & Desjeux, Yann & Jeanneaux, Philippe & Latruffe, Laure, 2016. "Productivity, efficiency and technological change in French agriculture during 2002-2014: A Färe-Primont index decomposition," 149th Seminar, October 27-28, 2016, Rennes, France 244793, European Association of Agricultural Economists.
    5. Guastella, Giovanni & Veneziani, Mario & Sckokai, Paolo & Moro, Daniele, "undated". "Simulation Results on the Impact of Changes in the Main EU Policy Tools on Farm Investment Behaviour," Working papers 157115, Factor Markets, Centre for European Policy Studies.
    6. Alain CARPENTIER & Alexandre GOHIN & Paolo SCKOKAI & Alban THOMAS, 2015. "Economic modelling of agricultural production:past advances and new challenges," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 96(1), pages 131-166.
    7. repec:ags:aaea13:150610 is not listed on IDEAS
    8. Feil, Jan-Henning & Musshoff, Oliver, 2012. "Policy Impact Analysis on Investments and Disinvestments under Competition: A Real Options Approach," 2012 Conference (56th), February 7-10, 2012, Fremantle, Australia 124294, Australian Agricultural and Resource Economics Society.
    9. Delbridge, Timothy A., 2013. "Threshold Effects in Transition to Organic Dairy Production," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150554, Agricultural and Applied Economics Association.
    10. Alexandre Gohin & Yu Zheng, 2016. "Assessing the Decoupling of EU Agricultural Policy on Farm Decisions - A Dynamic Stochastic Attempt," FOODSECURE Working papers 45, LEI Wageningen UR.
    11. Guastella, G. & Moro, D. & Sckokai, P. & Veneziani, M., 2013. "CAP Effects on Agricultural Investment Demand in Europe," 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152256, International Agricultural Trade Research Consortium.
    12. O’Toole, Conor & Hennessy, Thia, 2015. "Do decoupled payments affect investment financing constraints? Evidence from Irish agriculture," Food Policy, Elsevier, vol. 56(C), pages 67-75.
    13. Zein Kallas & Teresa Serra & Jos頠 M. Gil, 2012. "Effects of policy instruments on farm investments and production decisions in the Spanish COP sector," Applied Economics, Taylor & Francis Journals, vol. 44(30), pages 3877-3886, October.
    14. Ihli, Hanna Julia & Gassner, Anja & Musshoff, Oliver, 2018. "Experimental insights on the investment behavior of small-scale coffee farmers in central Uganda under risk and uncertainty," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 75(C), pages 31-44.
    15. Petrick, Martin & Zier, Patrick, 2010. "Cap Impacts On Labour Use In East German Agriculture," 50th Annual Conference, Braunschweig, Germany, September 29-October 1, 2010 93962, German Association of Agricultural Economists (GEWISOLA).
    16. Femenia, Fabienne & Latruffe, Laure & Chavas, Jean-Paul, "undated". "Responsiveness of farm investment to price changes: An empirical study of the French crop sector," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261421, European Association of Agricultural Economists.
    17. Czubak, Wawrzyniec & Pawłowski, Krzysztof Piotr & Sadowski, Arkadiusz, 2021. "Outcomes of farm investment in Central and Eastern Europe: The role of financial public support and investment scale," Land Use Policy, Elsevier, vol. 108(C).
    18. Mary, Sebastien & Santini, Fabien & Boulanger, Pierre, 2013. "An Ex-Ante Assessment of CAP Income Stabilisation Payments using a Farm Household Model," 87th Annual Conference, April 8-10, 2013, Warwick University, Coventry, UK 158860, Agricultural Economics Society.
    19. Wawrzyniec Czubak & Krzysztof Piotr Pawłowski, 2024. "The Impact of Agricultural Investments on the Economic Efficiency of Production Factors: An Empirical Study of the Wielkopolska Voivodeship," Agriculture, MDPI, vol. 14(12), pages 1-16, December.
    20. Guastella, Giovanni & Moro, Daniele & Sckokai, Paolo & Veneziani, Mario, "undated". "Investment behaviour of EU arable crop farms in selected EU countries and the impact of policy reforms," Working papers 152083, Factor Markets, Centre for European Policy Studies.
    21. Moro, Daniele & Sckokai, Paolo, 2013. "The impact of decoupled payments on farm choices: Conceptual and methodological challenges," Food Policy, Elsevier, vol. 41(C), pages 28-38.
    22. K Hervé Dakpo & Yann Desjeux & Philippe Jeanneaux & Laure Latruffe, 2017. "Productivity, technical efficiency and technological change in French agriculture during 2002-2014: A Färe-Primont index decomposition," Working Papers SMART 17-07, INRAE UMR SMART.
    23. Esposti, Roberto, 2015. "To match, not to matchm how to match: Estimating the farm-level impact of the 2005 CAP-first pillar reform," 2015 Conference, August 9-14, 2015, Milan, Italy 211625, International Association of Agricultural Economists.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:erevae:v:36:y:2009:i:1:p:103-120. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/eaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.