Economics at your fingertips  

The impact of liquidity and solvency on cost efficiency

Levi Russell, Michael Langemeier and Brian Briggeman ()

Agricultural Finance Review, 2013, vol. 73, issue 3, 413-425

Abstract: Purpose - – This paper aims to develop and utilize a conceptual framework to examine the impact of liquidity and solvency on cost efficiency for a sample of Kansas farms. Design/methodology/approach - – A standard cost-efficiency model is modified to incorporate liquidity and solvency ratios. Tobit regressions are used to determine the impact of farm characteristics on improvements in efficiency. Findings - – Results confirm that liquidity and solvency measures have a significant impact on improving cost efficiency. Farms with larger expenditures on purchased inputs relative to capital were less likely to improve efficiency when liquidity and solvency were considered. Originality/value - – To the authors' knowledge, the paper is the first to add liquidity and solvency ratios to the cost-efficiency model developed by Färe

Keywords: Cost efficiency; Liquidity; DEA; Farm management; Solvency (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) ... RePEc&WT.mc_id=RePEc (text/html)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
http://emeraldgroupp ... /journals.htm?id=afr

Access Statistics for this article

Agricultural Finance Review is currently edited by Professor Calum G. Turvey

More articles in Agricultural Finance Review from Emerald Group Publishing
Bibliographic data for series maintained by Virginia Chapman ().

Page updated 2020-09-23
Handle: RePEc:eme:afrpps:v:73:y:2013:i:3:p:413-425