Consequences of supports to the economic situation of farms with respect to their size

Zdenka Naglova and Martin Gurtler
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Zdenka Naglova: Department of Economics, Faculty of Economics and Management, Czech University of Life Sciences Prague, Prague, Czech Republic
Martin Gurtler: Department of Economics, Faculty of Economics and Management, Czech University of Life Sciences Prague, Prague, Czech Republic

Agricultural Economics, 2016, vol. 62, issue 7, 311-323

Abstract: The article is dealing with an issue of subsidies granted to agricultural enterprises arising from the Common Agricultural Policy (CAP). The aim of the paper is to quantify the effects of the individual subsidies that were used by agricultural enterprises according to their profits, losses and revenues. The size structure of agricultural enterprises in the Czech Republic is taken into account for more detailed measures of the subsidy impact. The article uses key data such as financial statements of agricultural enterprises and subsidies that were received by companies over the years 2007-2011. The analysis was performed by using the fixed effect model. An evaluation of current economic situation of these enterprises including the structure of drawn subsidies was carried out before the analysis. Different impacts of subsidies on the company´s management have been proved. The subsidies influence the medium and large enterprises significantly and positively. A negative impact of subsidies was observed on profits and revenues of small businesses. Detailed results are described in the article.

Keywords: agriculture enterprises; economic situation; fixed effect model; subsidies (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:62:y:2016:i:7:id:191-2015-agricecon

DOI: 10.17221/191/2015-AGRICECON

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