Investment and Financial Constraints in European Agriculture: Evidence from France, Hungary and Slovenia

Imre Fertő, Zoltán Bakucs (), Štefan Bojnec () and Laure Latruffe

No 114357, 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland from European Association of Agricultural Economists

Abstract: The article investigates the investment and financial constraints for French, Hungarian and Slovenian farms using FADN panel data with different econometric estimation approaches. Farm gross investment is positively associated with real sales growth and cash flow implying the absence of soft budget constraint. Gross farm investment is positively associated with investment subsidies. Specific results by country are found depending on farm indebtedness. Investment subsidies can mitigate some capital market imperfections in short-term, while on long-term what is crucial is farm sale ability to successfully compete in the output market gaining sufficient cash flow for farm competitive survival and investment.

Keywords: Agricultural; Finance (search for similar items in EconPapers)
Pages: 11
Date: 2011
New Economics Papers: this item is included in nep-agr and nep-tra
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Working Paper: Investment and Financial Constraints in European Agriculture: Evidence from France, Hungary and Slovenia (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae11:114357

DOI: 10.22004/ag.econ.114357

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