Debt Financing and Efficiency in Agricultural Firms

Silverio Alarcón

No 9436, 103rd Seminar, April 23-25, 2007, Barcelona, Spain from European Association of Agricultural Economists

Abstract: In this work the effects of large- and short-term debts on efficiency are tested on a set of agricultural firms. Accounting data of crop, livestock, mixed and service firms are used. First, the efficiencies of the farms are obtained by using nonparametric methods (input-oriented DEA). Then, in a second stage, censored regressions are run with different kinds of explicative variables, including financial ratios. The results show a significative and positive relationship between short-term indebtedness and efficiency, which would be agree with some theories positing that firms with higher short-run obligations make additional efforts to satisfy their payments, and this leads to an improvement of efficiency.

Keywords: Agricultural; Finance (search for similar items in EconPapers)
Pages: 15
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa103:9436

DOI: 10.22004/ag.econ.9436

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