The Source of Productivity Growth in Dutch Agriculture: A Perspective from Finance |
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Authors: | Guan Zhengfei Alfons Oude Lansink |
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Institution: | Guan Zhengfei is researcher and Alfons Oude Lansink is professor at the Business Economics Group, Wageningen University, The Netherlands. |
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Abstract: | In corporate finance, the impact of capital structure on firm performance has been widely studied. This article extends the capital structure study to the situation in agriculture, explicitly addressing the difference between family farms and corporate firms. We use the Malmquist productivity growth index as a proxy for performance to study the impact of capital structure (debt) on farm performance. We compare the results with those from the traditional performance model that uses profitability (e.g., return on equity (ROE)) as performance measure. Using data from Dutch arable farms, results show that debt has no effect on ROE, whereas it has a positive effect on productivity growth. |
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Keywords: | capital structure dynamics endogeneity farm performance productivity growth serial correlation |
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