Credit Constraints: Their Existence, Determinants, and Implications for U.S. Farm and Nonfarm Sole Proprietorships

Charles Towe () and Mitchell J. Morehart

American Journal of Agricultural Economics, 2009, vol. 91, issue 1, 275-289

Abstract: The objective of this study is to determine the effect of credit constraints on production for farm and nonfarm sole proprietorships. A propensity score-matching estimator is employed to provide unbiased estimates of the production impacts of being denied credit. The empirical results demonstrate that the value of production is significantly lower for credit-constrained sole proprietorships. If this drop in the value of production is aggregated to a national level, it constitutes only 3% and 13% of total value of production for farm and nonfarm sole proprietorships, respectively. Copyright 2009, Oxford University Press.

Date: 2009
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