Getting Institutions 'Right' for Whom: Credit Constraints and the Impact of Property Rights on the Quantity and Compostiton of Investment
The effects of property rights on investment are typically hypothesized to occur through a security-induced investment demand and a collateral-based credit supply. Using a two period model, this paper shows that for farms that are constrained in their access to liquidity, the investment demand effect will itself induce an increase in the endogenous shadow price of liquidity. Other things equal, this induced increase in the price of liquidity will discourage capital accumulation, and that the desired stock of expropriation-immune movable capital may decrease with tenure security. Empirical analysis of farm-level data from Paraguay corroborates this proposition and reveals that the underlying pattern of wealth-biased capital access creates a world in which property rights reform has differential effects across producer wealth classes and gets institutions "right" and agriculture moving for only for a wealthier subset of producers.
|Date of creation:||Jun 2000|
|Contact details of provider:|| Postal: 427 Lorch Street, Madison, WI 53706-1503|
Web page: http://www.aae.wisc.edu/pubs/sps/
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.:
- Bo Honore & Ekaterini Kyriazidou & J. L. Powell, 2000. "Estimation of tobit-type models with individual specific effects," Econometric Reviews, Taylor & Francis Journals, vol. 19(3), pages 341-366.
- Gershon Feder & Tongroj Onchan, 1987. "Land Ownership Security and Farm Investment in Thailand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(2), pages 311-320.
- Gershon Feder & Tongroj Onchan, 1989. "Land Ownership Security and Farm Investment: Reply," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(1), pages 215-216.
- Bell, Clive & Srinivasan, T N & Udry, Christopher, 1997. "Rationing, Spillover, and Interlinking in Credit Markets: The Case of Rural Punjab," Oxford Economic Papers, Oxford University Press, vol. 49(4), pages 557-585, October.
- Carter, Michael R., 1988. "Equilibrium credit rationing of small farm agriculture," Journal of Development Economics, Elsevier, vol. 28(1), pages 83-103, February.
- Barham, Bradford L. & Boucher, Stephen & Carter, Michael R., 1996. "Credit constraints, credit unions, and small-scale producers in Guatemala," World Development, Elsevier, vol. 24(5), pages 793-806, May.
- Gourieroux, Christian & Monfort, Alain, 1993. "Simulation-based inference : A survey with special reference to panel data models," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 5-33, September.
When requesting a correction, please mention this item's handle: RePEc:ecl:wisagr:433. 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: ()
If references are entirely missing, you can add them using this form.