Does Capital Market Structure Affect Farm Investment? A Comparison using French and British Farm-Level Panel Data

Catherine Benjamin and Euan Phimister

American Journal of Agricultural Economics, 2002, vol. 84, issue 4, 1115-1129

Abstract: This article considers whether differences in the structure of agriculture credit markets in France and the United Kingdom alters the investment sensitivity to financial variables particularly cash flow. Using two panel datasets of French and British farms, three approaches are used to test the sensitivity of investment to internal finance, an inventory investment model, a fundamental q-model, and Euler equations for machinery investment. The results suggest that the contrasting capital markets structures do induce differences in overall investment sensitivity to cash flow and its pattern across both farms with varying levels of collateral and between inventory and machinery investment. Copyright 2002, Oxford University Press.

Date: 2002
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Related works:
Working Paper: Does capital market structure affect farm investment ? A comparison using French and British farm-level panel data (2002)
Working Paper: Does capital market structure affect farm investment ? A comparison using French and British farm level panel data (1998)
Working Paper: Does capital market structure affect farm investment ? A comparison using French and British farm level panel data (1997)
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