Which Factors Influence Investments of Ukrainian Agroholdings in Biogas?

Dmytro Romets and Klaus Menrad

No 245876, 155th Seminar, September 19-21, 2016, Kiev, Ukraine from European Association of Agricultural Economists

Abstract: Investments in biogas technologies are regarded with increasing interest as an effective instrument for natural gas substitution, accelerating the recovery from the recent financial crisis in Ukraine. Yet, despite economic, environmental and social advantages of biogas and regulations implemented to support it, biogas investments remain below expectations. Therefore, it is necessary to understand the investment behaviour of Ukrainian agricultural companies regarding biogas and their reactions to the support measures. This paper aims to empirically analyse the willingness-to-invest in biogas of large Ukrainian agroholdings. Top-managers of 68 agroholdings in Ukraine were interviewed personally. We proposed and tested a conceptual model that examines the institutional and individual factors affecting the investment behaviour of agricultural companies in the context of biogas. Our findings reveal that, confirming a rational evaluation of investment opportunities, primarily financial factors affect the willingness-to-invest in biogas in Ukraine. The investment behaviour of interviewed companies is mainly influenced by payback period, investment costs and subjective perception of relative advantages of biogas. Furthermore, other decision relevant parameters like feed-in tariff and natural gas price seem to play only minor roles. However, there are systemic problems which hamper biogas investments, such as lack of capital, geopolitical uncertainty and non-reliable legislative framework for biogas production. Our results shed new light on impact of institutional and individual factors on biogas investments in the agricultural sector of Ukraine and have meaningful implications for policy actions.

Keywords: Agribusiness; Farm Management (search for similar items in EconPapers)
Pages: 23
Date: 2016-09-20
New Economics Papers: this item is included in nep-cis and nep-ene
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/245876/files/E ... _Dmytro%20Romets.pdf (application/pdf)

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: https://EconPapers.repec.org/RePEc:ags:eaa155:245876

DOI: 10.22004/ag.econ.245876

Access Statistics for this paper

More papers in 155th Seminar, September 19-21, 2016, Kiev, Ukraine from European Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().