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Investment and Financial Constraints in European Agriculture: Evidence from France, Hungary and Slovenia

  • Ferto, Imre
  • Bakucs, Lajos Zoltan
  • Bojnec, Stefan
  • Latruffe, Laure

The article investigates the investment and financial constraints for French, Hungarian and Slovenian farms using FADN panel data with different econometric estimation approaches. Farm gross investment is positively associated with real sales growth and cash flow implying the absence of soft budget constraint. Gross farm investment is positively associated with investment subsidies. Specific results by country are found depending on farm indebtedness. Investment subsidies can mitigate some capital market imperfections in short-term, while on long-term what is crucial is farm sale ability to successfully compete in the output market gaining sufficient cash flow for farm competitive survival and investment.

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File URL: http://purl.umn.edu/114357
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Paper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 114357.

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Date of creation: 2011
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Handle: RePEc:ags:eaae11:114357
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  15. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
  16. Petrick, Martin, 2004. "Farm investment, credit rationing, and governmentally promoted credit access in Poland: a cross-sectional analysis," Food Policy, Elsevier, vol. 29(3), pages 275-294, June.
  17. Piet, Laurent & Desjeux, Yann & Latruffe, Laure & Le Mouel, Chantal, 2010. "How do agricultural policies influence farmland concentration? The example of France," 114th Seminar, April 15-16, 2010, Berlin, Germany 61349, European Association of Agricultural Economists.
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