The determinants of external private equity financing in agricultural production businesses
This study investigates the determinants that influence a firm’s decision to use external private equity in agriculture. The use of external equity as a funding source in agriculture has increased since 1990; however, the literature addressing this phenomenon is limited. The asset specificity approach (Williamson 1988) offers insightful contributions to understand the choice of financial mechanisms. Specifically, financial structure is related to asset specificity, the extent to which assets are redeployable to alternative uses, a particularly important attribute in agricultural production. I construct an international dataset of companies that receive external private equity finance to test the determinants of using external equity finance. Results show that the attributes of the assets involved in agriculture are important determinants of financing choices.
|Date of creation:||May 2012|
|Contact details of provider:|| Web page: http://www.iaae-agecon.org/|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Oliver Hart & John Moore, 1994. "A Theory of Debt Based on the Inalienability of Human Capital," The Quarterly Journal of Economics, Oxford University Press, vol. 109(4), pages 841-879.
- Allen, Douglas W & Lueck, Dean, 1998. "The Nature of the Farm," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 343-386, October.
- Martinez, Stephen W., 1999. "Vertical Coordination in the Pork and Broiler Industries: Implications for Pork and Chicken Products," Agricultural Economics Reports 34031, United States Department of Agriculture, Economic Research Service.
- Masten, Scott E & Meehan, James W, Jr & Snyder, Edward A, 1991. "The Costs of Organization," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(1), pages 1-25, Spring.
- Oliver Hart, 2001.
Harvard Institute of Economic Research Working Papers
1924, Harvard - Institute of Economic Research.
- Robert A. Collins & H. Joseph Bourn, 1986. "Market Requirements and Pricing for External Equity Shares in Farm Businesses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(5), pages 1330-1336.
- Hart, Oliver D. & Moore, John, 1990.
"Property Rights and the Nature of the Firm,"
3448675, Harvard University Department of Economics.
- Barry, Peter J. & Robison, Lindon J., 2001. "Agricultural finance: Credit, credit constraints, and consequences," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 10, pages 513-571 Elsevier.
- Tobias J. Moskowitz & Annette Vissing-Jørgensen, 2002. "The Returns to Entrepreneurial Investment: A Private Equity Premium Puzzle?," American Economic Review, American Economic Association, vol. 92(4), pages 745-778, September.
- Oliver Hart & Sanford Grossman, 1985.
"The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration,"
372, Massachusetts Institute of Technology (MIT), Department of Economics.
- Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
- Grossman, Sanford J. & Hart, Oliver D., 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Scholarly Articles 3450060, Harvard University Department of Economics.
- Grossman, Sanford J & Hart, Oliver, 1985. "The Cost and Benefits of Ownership: A Theory of Vertical and Lateral Integration," CEPR Discussion Papers 70, C.E.P.R. Discussion Papers.
- Williamson, Oliver E, 1988. " Corporate Finance and Corporate Governance," Journal of Finance, American Finance Association, vol. 43(3), pages 567-591, July.
- Tobias J. Moskowitz & Annette Vissing-Jorgensen, 2002. "The Returns to Entrepreneurial Investment: A Private Equity Premium Puzzle?," NBER Working Papers 8876, National Bureau of Economic Research, Inc.
- Erin Anderson & David C. Schmittlein, 1984. "Integration of the Sales Force: An Empirical Examination," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 385-395, Autumn.
- Lafontaine, Francine & Slade, Margaret, 2007.
"Vertical Integration and Firm Boundaries : The Evidence,"
The Warwick Economics Research Paper Series (TWERPS)
799, University of Warwick, Department of Economics.
- Francine Lafontaine & Margaret Slade, 2007. "Vertical Integration and Firm Boundaries: The Evidence," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 629-685, September.
- Steven N. Kaplan & Antoinette Schoar, 2005.
"Private Equity Performance: Returns, Persistence, and Capital Flows,"
Journal of Finance,
American Finance Association, vol. 60(4), pages 1791-1823, 08.
- Kaplan, Steve & Schoar, Antoinette, 2004. "Private Equity Performance: Returns, Persistence and Capital Flows," Working papers 4446-03, Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Peter G. Klein, "undated". "Entrepreneurship and Corporate governance," IVS/CBS Working Papers 98-15, Department of Industrial Economics and Strategy, Copenhagen Business School.
- Masten, Scott E. & Meehan, James Jr. & Snyder, Edward A., 1989. "Vertical integration in the U.S. auto industry : A note on the influence of transaction specific assets," Journal of Economic Behavior & Organization, Elsevier, vol. 12(2), pages 265-273, October.
- Philip M. Raup, 1986. "Use of Equity Capital in Financing Future Agricultural Production: Discussion," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(5), pages 1337-1339.
- Paul Gompers & Josh Lerner, 2001. "The Venture Capital Revolution," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 145-168, Spring.
When requesting a correction, please mention this item's handle: RePEc:ags:iaae12:127135. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.