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Performance of different institutional units in the Czech Republic and the role of external financing

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  • Sophia Davidova

    (Imperial College London)

  • Laure Latruffe

    (Économie et Sociologie Rurales - INRA - Institut National de la Recherche Agronomique)

  • Tomas Ratinger

    (VUZE - Research Institute of Agricultural Economics)

Abstract

The paper analyses the relationship between the financial structure of the different institutional units in the Czech Republic and their performance, by testing several theoretical hypotheses. It employs Data Envelopment Analysis to estimate separately corporate and individual farms' technical efficiency, and investigates the effect of indebtedness on efficiency in a second stage, accounting for potential endogeneity. No substantial differences were detected between individual and corporate farms. For both groups higher long-term indebtedness negatively affects farm performance (agency theory and adjustment hypothesis), while the latter is used for appraising loan applications (credit evaluation). Case studies to banks and farms confirmed these findings.

Suggested Citation

  • Sophia Davidova & Laure Latruffe & Tomas Ratinger, 2005. "Performance of different institutional units in the Czech Republic and the role of external financing," Post-Print hal-02285613, HAL.
    • Handle: RePEc:hal:journl:hal-02285613
    Note: View the original document on HAL open archive server: https://hal.science/hal-02285613
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    1. Sophia Davidova & Laure Latruffe & Tomas Ratinger, 2005. "Performance of different institutional units in the Czech Republic and the role of external financing," Post-Print hal-02285613, HAL.

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