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 journalArticle

32 Citations (Scopus)

Abstract

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
Volume84
Issue number4
DOIs
Publication statusPublished - Nov 2002

Keywords

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

Cite this

Does capital market structure affect farm investment? A comparison using French and British farm level panel data. / Benjamin, Catherine; Phimister, Euan.

In: American Journal of Agricultural Economics, Vol. 84, No. 4, 11.2002, p. 1115-1129.

Research output: Contribution to journalArticle

@article{8b23febdbd6445de86469590bfe88c84,
title = "Does capital market structure affect farm investment? A comparison using French and British farm level panel data",
abstract = "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.",
keywords = "cash flow, farm investment, France, panel data, United Kingdom, CONSTRAINTS, FINANCE",
author = "Catherine Benjamin and Euan Phimister",
year = "2002",
month = "11",
doi = "10.1111/1467-8276.00372",
language = "English",
volume = "84",
pages = "1115--1129",
journal = "American Journal of Agricultural Economics",
issn = "0002-9092",
publisher = "Oxford University Press",
number = "4",

}

TY - JOUR

T1 - Does capital market structure affect farm investment? A comparison using French and British farm level panel data

AU - Benjamin, Catherine

AU - Phimister, Euan

PY - 2002/11

Y1 - 2002/11

N2 - 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.

AB - 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.

KW - cash flow

KW - farm investment

KW - France

KW - panel data

KW - United Kingdom

KW - CONSTRAINTS

KW - FINANCE

U2 - 10.1111/1467-8276.00372

DO - 10.1111/1467-8276.00372

M3 - Article

VL - 84

SP - 1115

EP - 1129

JO - American Journal of Agricultural Economics

JF - American Journal of Agricultural Economics

SN - 0002-9092

IS - 4

ER -