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How Costly are (Agricultural) Investments during Economic Transition? A Critical Literature Appraisal

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  • Zinych, Nataliya
  • Odening, Martin

Abstract

This paper critically examines a large strand of empirical literature with regard to (agricultural) finance and investment in economic transition. Our main contribution is to summarize empirical evidence for the co-existence of credit constraints and soft budget constraints (SBC) and to highlight a conceptual framework for their appropriate classification. This is of particular interest since credit constraints and SBC have really different economic effects, and the lack of discrimination between these forms of capital market imperfections may lead to wrong (agricultural) policy implications. Apparently, credit constraints in transitional economies became more important than soft budget constraints for firms’ growth and structural change.

Suggested Citation

  • Zinych, Nataliya & Odening, Martin, 2009. "How Costly are (Agricultural) Investments during Economic Transition? A Critical Literature Appraisal," 2009 Conference, August 16-22, 2009, Beijing, China 50319, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae09:50319
    DOI: 10.22004/ag.econ.50319
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    References listed on IDEAS

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    Cited by:

    1. Simonovska, Ana & Gjosevski, Dragan & Campos, Monica, 2012. "Capital Structure And Financial Performance Of Agricultural Companies – Evidences From The Macedonian Agricultural Sector In Transition," 132nd Seminar, October 25-27, 2012, Skopje, Republic of Macedonia 139501, European Association of Agricultural Economists.

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    Agricultural Finance; Financial Economics;

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