Exploring Farm investment Behaviour in Transition: The Case of Russian Agriculture

Research output: Contribution to journalArticleAcademicpeer-review

6 Citations (Scopus)

Abstract

This paper analyses the investment behaviour of Russian farms during the period of economic stabilisation that followed Russia's financial crisis of 1998, and is the first to apply the error-correction investment model to describe farms' investment behaviour in the transitional context. Additionally, the paper employs the error-correction and the adjustment-cost model to test for differences in the investment behaviour between various farm categories. The results show that in general Russian farms exhibited an error-correcting behaviour in the period under investigation. From 1999 to 2005 the output¿capital gap was closed by an average rate of 10% per year. Estimates of the adjustment-cost model show that Russian farm investments are very sensitive to the sales¿capital ratio, suggesting that Russian farms exhibit increasing returns to scale and positive expectations about future revenues. Yet, such farm characteristics as ownership structure, access to input markets and also regional specifics were found to be decisive for farm investment not only in the short but long term too. Finally, the results show that the adjustment-cost model is adequate for the evaluation of differences in short-term investment behaviour, whereas it is noticeably less powerful for investigating differences in the farms' long-term investment behaviour
Original languageEnglish
Pages (from-to)436-464
JournalJournal of Agricultural Economics
Volume60
Issue number2
DOIs
Publication statusPublished - 2009

Keywords

  • soft budget constraints
  • panel-data
  • financing constraints
  • flow sensitivities
  • market-economy
  • models
  • impact
  • poland
  • inefficiency
  • firms

Fingerprint Dive into the research topics of 'Exploring Farm investment Behaviour in Transition: The Case of Russian Agriculture'. Together they form a unique fingerprint.

Cite this