FIRM-LEVEL EVIDENCE OF DEADWEIGHT LOSS OF INVESTMENT SUPPORT POLICIES: A CASE STUDY OF DAIRY FARMS IN SCHLESWIG-HOLSTEIN

Jerzy Michalek, Pavel Ciaian and d'Artis Kancs

No 152257, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain from International Agricultural Trade Research Consortium

Abstract: The main objective of the present study is to estimate the extent to which the RDP investment support has a complementary or a substitutionary effect on farm investments. In order to answer this question, we attempt to quantify the potential deadweight loss by estimating the extent to which the RDP beneficiaries would have undertaken comparable investments also without the investment support. We find that the deadweight loss of the RDP is close to 100%, implying that firm investment would have been undertaken also without the support. These results suggest that capital market distortions are not significant in Schleswig- Holstein. Similarly, no evidence was found that, due to programme support, farms would have brought forward their investments planned originally in a later period, suggesting no evidence of inter-temporal substitution of investments. These results are new, as the deadweight loss and its conditionality have not been studied in the context of the RDP in Germany before.

Keywords: Agricultural and Food Policy; Community/Rural/Urban Development; International Relations/Trade; Public Economics (search for similar items in EconPapers)
Pages: 30
Date: 2013-06
New Economics Papers: this item is included in nep-agr and nep-spo
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Investment Crowding Out: Firm-Level Evidence from Northern Germany (2016)
Working Paper: Investment crowding-out: firm-level evidence from Germany (2015)
Working Paper: Firm-Level Evidence of Deadweight Loss of Investment Support Policies: A Case Study of Dairy Farms in Schleswig-Holstein (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iatr13:152257

DOI: 10.22004/ag.econ.152257

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