Efficiency and Capital Structure in the Italian Cereal Sector

Marco Tiberti, Gianluca Stefani and Ginevra Lombardi

No 244539, 2016 International European Forum (151st EAAE Seminar), February 15-19, 2016, Innsbruck-Igls, Austria from International European Forum on System Dynamics and Innovation in Food Networks

Abstract: Farm capital structure may have contrasting effects on farm efficiency as a strand of the farm efficiency literature as pointed out ( for a review see for example Davidova and Latruffe 2007). Farmers often use external funding both to cover productions costs and to finance investments (machinery, equipment, buildings) to enhance farm economic performance. The debt is necessary to maintain or improve farm productivity and competitiveness by adopting technological innovation needed to increase farm efficiency. At the same time leverage may affects farm efficiency by influencing farm production decision constrained by lower farm expenditure capacity. In this case, farms response may rely on reducing the necessary expenditures to maintain the production assets with negative consequences on farm productivity, growth and efficiency. Finally, farm leverage may affects the farms capacity to react to market shocks adopting the needed strategic adjustments to maintain productivity, efficiency and competitiveness. A relevant case study for assessing this last effect would be the recent surge in price volatility that affected European and world cereal markets starting from 2008.

Keywords: Agribusiness (search for similar items in EconPapers)
Pages: 6
Date: 2016-05
New Economics Papers: this item is included in nep-agr, nep-eff and nep-sog
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iefi16:244539

DOI: 10.22004/ag.econ.244539

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