The Dynamic Effects of Investment Support of the EU Rural Developent Programme on Czech Farms' Structure and Performance

T. Ratinger, Jarmila Curtiss, T. Medonos and M. Hruska

No 276043, 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia from International Association of Agricultural Economists

Abstract: The objective of the paper is to assess economic and structural effects of the measure “Modernisation of Agricultural Holdings” of the Rural Development Programme 2007-2013 on the Czech farms. A particular attention is paid to its dynamic and time-differentiated impacts. We use Direct Covariate Matching to address issues of potential selection bias, simultaneity bias or functional form misspecification. Our empirical results show significant short as well as long-term investment support effects, which, however, markedly vary between support periods. This may relate to the rapidly changing overall financial and investment conditions for agriculture. The investment support of the earlier period of 2008-2011 which overlaps with the time of economic crisis is found to have larger and more significant structural and performance effects than later investment support. It resulted in significant ruminant production expansion at the expense of farm cost efficiency, but contributed to a short-term TFP increase. These effects of support vanished in the latter periods characterized by favourable financial conditions. For this period, we find negative effects of investment support on total factor productivity that could indicate loss of additionality of investment support and/or differences in type of investments and their productivity realized by supported and non-supported farms.

Keywords: Agricultural and Food Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 23
Date: 2018-07
New Economics Papers: this item is included in nep-eff
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae18:276043

DOI: 10.22004/ag.econ.276043

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