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Drivers of Agricultural Physical Capital Development: Theoretical Framework and Hypotheses

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  • Kataria, Karin
  • Curtiss, Jarmila
  • Balmann, Alfons

Abstract

This paper aims to identify drivers of physical capital adjustments in agriculture. It begins with a review of some of the most important theories and modelling approaches regarding firms’ adjustments of physical capital, ranging from output-based models to more recent approaches that consider irreversibility and uncertainty. Thereafter, it is suggested that determinants of physical capital adjustments in agriculture can be divided into three main groups, namely drivers related to: i)expected (risk-adjusted) profit, ii) expected societal benefits and costs and iii) expected private nonpecuniary benefits and costs. The discussion that follows focuses on the determinants belonging to the first group and covers aspects related to product market conditions, technological conditions, financial conditions and the role of firm structure and organization. Furthermore, the role of subjective beliefs is emphasized. The main part of this paper is concerned with the demand side of the physical capitalmarket and one section also briefly discusses some aspects related to supply of farm assets.

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  • Kataria, Karin & Curtiss, Jarmila & Balmann, Alfons, 2012. "Drivers of Agricultural Physical Capital Development: Theoretical Framework and Hypotheses," Factor Markets Working Papers 122, Centre for European Policy Studies.
  • Handle: RePEc:eps:fmwppr:122
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    Cited by:

    1. Kusz, Dariusz, 0. "Significance of public funds in investment activity of farms in Poland (on the example of Podkarpacie)," Problems of Agricultural Economics, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    2. Petrick, Martin & Kloss, Mathias, 2012. "Drivers of agricultural capital productivity in selected EU member states," Factor Markets Working Papers 137, Centre for European Policy Studies.
    3. Sibel Balı Eryiğit & Kadir Yasin Eryiğit & Ercan Dülgeroğlu, 2015. "Local Financial Development and Capital Accumulations: Evidence from Turkey," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(3), pages 339-360, June.
    4. Paul Eliccel, 2016. "Culture and Accumulation of Capital : An Empirical study in the Context Haitian Society
      [Culture et accumulation du capital : une étude empirique dans le contexte social haïtien]
      ," Working Papers hal-01555285, HAL.
    5. Lefebvre, Marianne & Gomez y Paloma, Sergio & Viaggi, Davide, 2014. "EU farmers' intentions to invest in 2014-2020: complementarity between asset classes," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182737, European Association of Agricultural Economists.
    6. Eliccel Paul, 2017. "Culture et accumulation du capital : une étude empirique dans le contexte social haïtien," Working Papers hal-01567104, HAL.

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