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The Financial Determinants of Investment Level Based on the Direction of Production of Agricultural Enterprises in the European Union

Krzysztof Firlej and Sebastian Kubala

European Research Studies Journal, 2021, vol. XXIV, issue 3, 140-152

Abstract: Purpose: The article aims to analyze relations between the direction of production of agricultural enterprises in the European Union and the level of investment in the years 2005-2018. As the research hypothesis assumed, the directions of agricultural enterprises' production in the European Union influence their level of investment. The additional aim is to draw attention to the most critical issues reflecting the significance of finances in investment decisions of agricultural enterprises. Design/Methodology/Approach: The study covers all the European Union member countries. The one-factor analysis of variance ANOVA was used to achieve the research objective. Findings: The studies prove that agricultural enterprises' directions in the European Union substantially diversify their values of the investment level. The most significant differences in the investment level were observed between the agricultural enterprises specializing in granivores and milk and the plant production agricultural enterprises. Practical Implications: The investment activities of agricultural enterprises result from their market activity and modernization of their assets. Decisions made by enterprises depend on their financial resources and have a significant impact on their development opportunities. The growth of owned fixed assets or the improvement of their quality may substantially contribute to the increase of the production potential of agricultural enterprises involved in plant production and animal production. Originality/Value: The existing literature does not present a detailed differentiation of the level of investment in individual types of farms, in line with the FADN methodology.

Keywords: Gross investment; net investment; agriculture; FADN; ANOVA. (search for similar items in EconPapers)
JEL-codes: E22 O13 Q14 (search for similar items in EconPapers)
Date: 2021
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