Does capital market structure affect farm investment? A comparison using French and British farm level panel data

Catherine Benjamin, Euan Phimister

Research output: Contribution to journalArticlepeer-review

43 Citations (Scopus)


This article considers whether differences in the structure of agriculture credit markets in France and the United Kingdom alters the investment sensitivity to financial variables particularly cash flow. Using two panel datasets of French and British farms, three approaches are used to test the sensitivity of investment to internal finance, an inventory investment model, a fundamental q-model, and Euler equations for machinery investment. The results suggest that the contrasting capital markets structures do induce differences in overall investment sensitivity to cash flow and its pattern across both farms with varying levels of collateral and between inventory and machinery investment.

Original languageEnglish
Pages (from-to)1115-1129
Number of pages14
JournalAmerican Journal of Agricultural Economics
Issue number4
Publication statusPublished - Nov 2002


  • cash flow
  • farm investment
  • France
  • panel data
  • United Kingdom

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