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Short communication: East-West European farm investment behaviour - The role of financial constraints and public support

Fertő, Imre and Bakucs, Lajos Zoltán and Bojnec, Stefan and Latruffe, Laure (2017) Short communication: East-West European farm investment behaviour - The role of financial constraints and public support. Spanish Journal of Agricultural Research, 15 (1). DOI 10.5424/sjar/2017151-10252

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Official URL: https://doi.org/10.5424/sjar/2017151-10252


Abstract

The article investigated farm investment behaviour among East (Hungarian and Slovenian) and West (French) European Union farms using individual farm accountancy panel data for the 2003-2008 period. Despite differences in farm structures, except for the presence of capital market imperfections evidenced in the East, farms’ investment behaviour was not substantially different. Farm gross investment was positively associated with real sales’ growth. In addition, it was positively associated with public investment subsidies which can mitigate capital market imperfections in the short-term. On the long run, the farm’s ability to successfully compete in the output market by selling produce and securing a sufficient cash flow for investment is crucial.

Item Type:Article
Uncontrolled Keywords:farm credit; soft budget constraint; investment subsidy; panel data analysis; European Union
Subjects:Agriculture
DOI:10.5424/sjar/2017151-10252
ID Code:2916
Deposited By: Ádám Hoffmann
Deposited On:13 Jun 2017 13:17
Last Modified:13 Jun 2017 13:17

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