Credit Constraints: Their Existence, Determinants, and Implications for U.S. Farm and Nonfarm Sole Proprietorships |
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| Authors: | Brian C. Briggeman Charles A. Towe Mitchell J. Morehart |
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| Affiliation: | Brian C. Briggeman is assistant professor in the Department of Agricultural Economics, Oklahoma State University. Charles A. Towe and Mitchell J. Morehart are economists with the Economic Research Service. |
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| Abstract: | The objective of this study is to determine the effect of credit constraints on production for farm and nonfarm sole proprietorships. A propensity score-matching estimator is employed to provide unbiased estimates of the production impacts of being denied credit. The empirical results demonstrate that the value of production is significantly lower for credit-constrained sole proprietorships. If this drop in the value of production is aggregated to a national level, it constitutes only 3% and 13% of total value of production for farm and nonfarm sole proprietorships, respectively. |
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| Keywords: | credit constraint debt farm credit propensity score-matching |
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