Synthesis Report on the Impact of Capital Use

Martin Petrick and Mathias Kloss ()

No 157116, Working papers from Factor Markets, Centre for European Policy Studies

Abstract: This paper examines the drivers of productivity in EU agriculture from a factor markets perspective. Using econometrically estimated production elasticities and shadow prices of factors for a set of eight EU member states, we focus on field crop farms represented in the FADN database for the years 2002-08. As it turned out that output reacts most elastically to materials input, we investigate this factor further and find different rationing regimes represented in different member states. Marginal return on materials is low in Denmark and West Germany, but significantly above typical market interest rates in East Germany, Italy and Spain. In the latter countries and in Denmark it also increased towards the end of the observed period. This finding is consistent with a perception of tightening funding access, possibly induced or reinforced by the unfolding financial crisis. Marginal returns to land, labour and fixed capital are generally low. We conclude that the functioning of factor markets plays a crucial role for productivity growth, but that factor market operations display considerable heterogeneity across EU member states.

Keywords: Agricultural; Finance (search for similar items in EconPapers)
Pages: 22
Date: 2013-08-06
New Economics Papers: this item is included in nep-agr, nep-eff and nep-eur
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Related works:
Working Paper: Synthesis Report on the Impact of Capital Use (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:famawp:157116

DOI: 10.22004/ag.econ.157116

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