IDEAS home Printed from https://ideas.repec.org/a/taf/nzecpp/v53y2019i2p203-214.html
   My bibliography  Save this article

Succession and investment in New Zealand farming

Author

Listed:
  • William Wright
  • P Brown

Abstract

Farms in New Zealand are traditionally run as family businesses in which land and capital are handed down from one generation to the next. Such family businesses have time horizons that are measured in generations rather than years, and the identification of a successor encourages long-term planning that farms without successors cannot justify. Simultaneously, farms that invest in productive capital have higher future earnings potential, ceteris paribus, and therefore be more attractive to potential successors. Both of these relationships imply a correlation between succession planning and investment. In this paper we separate the causal effect succession planning has on investment using two-stage ordered probit regression with instrumental variables, namely, the extent farmers report they farm due to family tradition and the number of generations that the family has farmed in New Zealand. Our results show that the presence of a successor does in fact raise investment.

Suggested Citation

  • William Wright & P Brown, 2019. "Succession and investment in New Zealand farming," New Zealand Economic Papers, Taylor & Francis Journals, vol. 53(2), pages 203-214, May.
    • Handle: RePEc:taf:nzecpp:v:53:y:2019:i:2:p:203-214
    DOI: 10.1080/00779954.2017.1419501
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00779954.2017.1419501
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00779954.2017.1419501?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

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


    Cited by:

    1. Muñoz-Ulecia, E. & Bernués, A. & Casasús, I. & Olaizola, A.M. & Lobón, S. & Martín-Collado, D., 2021. "Drivers of change in mountain agriculture: A thirty-year analysis of trajectories of evolution of cattle farming systems in the Spanish Pyrenees," Agricultural Systems, Elsevier, vol. 186(C).
    2. Agnieszka Strzelecka & Danuta Zawadzka, 2023. "Savings as a Source of Financial Energy on the Farm—What Determines the Accumulation of Savings by Agricultural Households? Model Approach," Energies, MDPI, vol. 16(2), pages 1-18, January.
    3. Danuta Zawadzka & Agnieszka Strzelecka & Ewa Szafraniec-Siluta, 2021. "Debt as a Source of Financial Energy of the Farm—What Causes the Use of External Capital in Financing Agricultural Activity? A Model Approach," Energies, MDPI, vol. 14(14), pages 1-17, July.

    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:taf:nzecpp:v:53:y:2019:i:2:p:203-214. 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: the person in charge (email available below). General contact details of provider: http://www.tandfonline.com/RNZP20 .

    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.