IDEAS home Printed from https://ideas.repec.org/h/lum/prchap/13-18.html

An Analysis of Investment Decisions in Agribusiness

In: 16th Economic International Conference NCOE 4.0 2020

Author

Listed:
  • Ioana Moldovan (Tonea)

    („1 Decembrie 1918†University of Alba Iulia, Romania)

  • Ioana Beleiu

    (Babes-Bolyai University, Cluj-Napoca, Romania)

Abstract

Investment decisions are meant to bring more efficiency in business being a complex problem in agriculture, both for farmers and for investors and banks. The complexity of this process is also determined by several factors that influence investment decisions. Thus, in the decision taking process usually managers and investors consider the expenditure over a period, the cost of the necessary capital and the expected profitability. Based on the literature review we proposed a list of determinant factors for the investment decision, such as: the increasing incomes provided by the investment, the market size, possible constraints, personal characteristics and the farm specific factors. In the current paper we analyse the relationship between investment decisions, managerial accounting and financing needs of agricultural businesses and identifying the key parts that make managerial accounting important for the creditworthiness of the company.The example analysed in this article proves that costs are not only a base for calculating capital budgeting indicators, but they are also essential for cash flow calculation. Moreover, cash flow proves to be important for a bank's decision in financing a project when essential indicators like liquidity rate are not adequate in the analysed case.

Suggested Citation

  • Ioana Moldovan (Tonea) & Ioana Beleiu, 2020. "An Analysis of Investment Decisions in Agribusiness," Book chapters-LUMEN Proceedings, in: Carmen NÄ‚STASE (ed.), 16th Economic International Conference NCOE 4.0 2020, edition 1, volume 13, chapter 18, pages 194-205, Editura Lumen.
    • Handle: RePEc:lum:prchap:13-18
    DOI: https://doi.org/10.18662/lumproc/ncoe4.0.2020/18
    as

    Download full text from publisher

    File URL: https://proceedings.lumenpublishing.com/ojs/index.php/lumenproceedings/article/view/331/331
    Download Restriction: no
    File URL: https://proceedings.lumenpublishing.com/ojs/index.php/lumenproceedings/article/view/331
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.18662/lumproc/ncoe4.0.2020/18?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
    ---><---

    References listed on IDEAS

    as
    1. Mikaël Akimowicz & Harry Cummings & Karen Landman, 2016. "Green lights in the Greenbelt? A qualitative analysis of farm investment decision-making in peri-urban Southern Ontario," Post-Print hal-01299322, HAL.
    2. Štefan Bojnec & Laure Latruffe, 2011. "Financing Availability and Investment Decisions of Slovenian Farms During the Transition to a Market Economy," Journal of Applied Economics, Taylor & Francis Journals, vol. 14(2), pages 297-317, November.
    3. Arthurton, Daniel A. & Moffitt, L. Joe & Allen, P. Geoffrey & Cox, Douglas A., 1995. "Do Farm Businesses And Big Businesses Apply Different Capital Budgeting Procedures?," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 24(2), pages 1-7, October.
    4. Savić, Bojan & Vasiljević, Zorica & Đorđević, Dragan, 2014. "Strategic Cost Management As Instrument For Improving Competitiveness Of Agribusiness Complex," Economics of Agriculture, Institute of Agricultural Economics, vol. 61(4), pages 1-16, December.
    5. Aramyan, Lusine H. & Lansink, Alfons G.J.M. Oude & Verstegen, Jos A.A.M., 2007. "Factors underlying the investment decision in energy-saving systems in Dutch horticulture," Agricultural Systems, Elsevier, vol. 94(2), pages 520-527, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lotte Yanore & Jaap Sok & Alfons Oude Lansink, 2024. "Do Dutch farmers invest in expansion despite increased policy uncertainty? A participatory Bayesian network approach," Agribusiness, John Wiley & Sons, Ltd., vol. 40(1), pages 93-115, January.
    2. Katrin Martens & Sebastian Rogga & Jana Zscheischler & Bernd Pölling & Andreas Obersteg & Annette Piorr, 2022. "Classifying New Hybrid Cooperation Models for Short Food-Supply Chains—Providing a Concept for Assessing Sustainability Transformation in the Urban-Rural Nexus," Land, MDPI, vol. 11(4), pages 1-24, April.
    3. Agnieszka Brelik & Barbara Golebiewska & Justyna Franc-Dabrowska, 2020. "Co-Financing of Organic Farming in the EU: Necessity or Fantasy?," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 547-557.
    4. Li, Wenbo & Wang, Dongyan & Li, Hong & Wang, Jianguo & Zhu, Yuanli & Yang, Yuewen, 2019. "Quantifying the spatial arrangement of underutilized land in a rapidly urbanized rust belt city: The case of Changchun City," Land Use Policy, Elsevier, vol. 83(C), pages 113-123.
    5. Premaratne Samaranayake & Weiguang Liang & Zhong-Hua Chen & David Tissue & Yi-Chen Lan, 2020. "Sustainable Protected Cropping: A Case Study of Seasonal Impacts on Greenhouse Energy Consumption during Capsicum Production," Energies, MDPI, vol. 13(17), pages 1-23, August.
    6. Enrico Gottero & Claudia Cassatella & Federica Larcher, 2021. "Planning Peri-Urban Open Spaces: Methods and Tools for Interpretation and Classification," Land, MDPI, vol. 10(8), pages 1-19, July.
    7. van Niekerk, H.N. & Taljaard, P.R. & Grové, B. & de Waal, H.O., 2013. "PR - Factors Affecting Small Livestock Predation In The Western Cape Province Of South Africa," 19th Congress, Warsaw, Poland, 2013 345687, International Farm Management Association.
    8. Geoffroy Enjolras & Gilles Sanfilippo, 2018. "The role of debt in financing French farm investments," Post-Print hal-02048362, HAL.
    9. Hohfeld, Lena & Waibel, Hermann, 2013. "Investments of Rural Households in Northeast Thailand and the Future of Small Scale Farming," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 52(3), pages 1-20, August.
    10. Fleiter, Tobias & Schleich, Joachim & Ravivanpong, Ployplearn, 2012. "Adoption of energy-efficiency measures in SMEs—An empirical analysis based on energy audit data from Germany," Energy Policy, Elsevier, vol. 51(C), pages 863-875.
    11. Enjolras, Geoffroy & Sanfilippo, Gilles, 2019. "La structure du capital des exploitations agricoles françaises," Économie rurale, French Society of Rural Economics (SFER Société Française d'Economie Rurale), vol. 369(July-Sept).
    12. Dongkwan Lee & Choongik Choi, 2021. "An Analysis of the Effects of Development-Restricted Areas on Land Price Using Spatial Analysis," Land, MDPI, vol. 10(6), pages 1-21, June.
    13. Tobias Fleitera & Joachim Schleich & Ployplearn Ravivanpong, 2012. "Adoption of energy-efficiency measures in SMEs - An empirical analysis based on energy audit data," Post-Print hal-00805748, HAL.
    14. Jansma, Jan Eelco & Wertheim-Heck, Sigrid C.O., 2022. "Feeding the city: A social practice perspective on planning for agriculture in peri-urban Oosterwold, Almere, the Netherlands," Land Use Policy, Elsevier, vol. 117(C).
    15. 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).
    16. Jiao Huang & Ze Liang & Shuyao Wu & Shuangcheng Li, 2019. "Grain Self-Sufficiency Capacity in China’s Metropolitan Areas under Rapid Urbanization: Trends and Regional Differences from 1990 to 2015," Sustainability, MDPI, vol. 11(9), pages 1-23, April.
    17. Louis Tessier & Jo Bijttebier & Fleur Marchand & Philippe V. Baret, 2021. "Cognitive mapping, flemish beef farmers’ perspectives and farm functioning: a critical methodological reflection," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 38(4), pages 1003-1019, December.
    18. Štefan BOJNEC, 2012. "Agricultural and rural capital markets in Turkey, Croatia and the FYR of Macedonia," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 58(11), pages 533-541.
    19. George, Sonda & Ngaruko, Deus, . "The Link between Farm Household Objectives and Investment in Irrigation Scheme: Implications for Collective Action Coordination Efficiency," African Journal of Economic Review, African Journal of Economic Review, vol. 5(01).
    20. Schlomann, Barbara & Schleich, Joachim, 2015. "Adoption of low-cost energy efficiency measures in the tertiary sector—An empirical analysis based on energy survey data," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 1127-1133.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • F1 - International Economics - - Trade
    • F3 - International Economics - - International Finance
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

    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:lum:prchap:13-18. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Antonio Sandu (email available below). General contact details of provider: https://proceedings.lumenpublishing.com/ojs/index.php/lumenproceedings .

    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.