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Changes in Debt Patterns and Financial Structure of Farm Businesses: A Double Hurdle Approach

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  • Harris, James Michael
  • Dillard, John
  • Erickson, Kenneth W.
  • Hallahan, Charles B.

Abstract

This paper uses a double hurdle model to help explain one aspect of the changing capital structure of U.S. production agriculture--the increase in the number of debt free farms. Our findings suggest that nonfinancial factors, such as operator age, region, risk aversion, and financial factors such as debt service ability and the cost of capital play significant roles in distinguishing borrowers from non borrowers.

Suggested Citation

  • Harris, James Michael & Dillard, John & Erickson, Kenneth W. & Hallahan, Charles B., 2009. "Changes in Debt Patterns and Financial Structure of Farm Businesses: A Double Hurdle Approach," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49402, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea09:49402
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    References listed on IDEAS

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    11. Calum G. Turvey & Alfons Weersink, 1997. "Credit Risk and the Demand for Agricultural Loans," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 45(3), pages 201-217, November.
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    More about this item

    Keywords

    farm debt; farm credit; double-hurdle model; farm businesses; Agricultural Finance;

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