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Productivity and Credit Constraints: Firm-Level Evidence from Propensity Score Matching

Author

Listed:
  • Ciaian, Pavel
  • Fa?kowski, Jan
  • d’Artis, Kanc
  • Pokrivcak, Jan
Abstract
Drawing on a unique, farm-level panel dataset with 37,409 observations and employing a matching estimator, this paper analyses how farm access to credit affects farm input allocation and farm efficiency in the Central and Eastern European transition countries. We find that farms are asymmetrically credit constrained with respect to inputs. Farm use of variable inputs and capital investment increases up to 2.3% and 29%, respectively, per €1,000 of additional credit. Our estimates also suggest that farm access to credit increases total factor productivity up to 1.9% per €1,000 of additional credit, indicating that an improvement in access to credit results in an adjustment in the relative input intensities on farms. This finding is further supported by a negative effect of better access to credit on labour, suggesting that these two are substitutes. Interestingly, farms are found not to be credit constrained with respect to land.

Suggested Citation

  • Ciaian, Pavel & Fa?kowski, Jan & d’Artis, Kanc & Pokrivcak, Jan, 2011. "Productivity and Credit Constraints: Firm-Level Evidence from Propensity Score Matching," Factor Markets Working Papers 99, Centre for European Policy Studies.
    • Handle: RePEc:eps:fmwppr:99
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    Cited by:

    1. Petrick, Martin & Kloss, Mathias, 2013. "Synthesis Report on the Impact of Capital Use," Factor Markets Working Papers 169, Centre for European Policy Studies.
    2. Tweneboah Asante, Isaac & K. Dziwornu, Raymond & Awunyo-Vitor, Dadson, 2020. "Hunger Project Credit Facility and Maize Productivity in Ghana," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 10(01), January.
    3. Marie-Noelle Duquenne & Maria Tsiapa & Valantis Tsiakos, 2019. "Contribution of the Common Agricultural Policy to agricultural productivity of EU regions during 2004–2012 period," Review of Agricultural, Food and Environmental Studies, Springer, vol. 100(1), pages 47-68, December.
    4. Petrick, Martin & Kloss, Mathias, 2012. "Drivers of agricultural capital productivity in selected EU member states," Working papers 132838, Factor Markets, Centre for European Policy Studies.
    5. Yue Hu & Siwei Lu & Huiyuan Zhang & Guibo Liu & Jiangang Peng, 2021. "Empirical Analysis on the Performance of Rural Credit Cooperative’s Shareholding Reform Based on the Rationale of Isomorphic Incentive Compatibility," Sustainability, MDPI, vol. 13(5), pages 1-29, March.
    6. Mathias Kloss & Thomas Kirschstein & Steffen Liebscher & Martin Petrick, 2019. "Robust Productivity Analysis: An application to German FADN data," Papers 1902.00678, arXiv.org, revised Feb 2019.
    7. Marzec, Jerzy & Pisulewski, Andrzej, 2019. "The Measurement of Time Varying Technical Efficiency and Productivity Change in Polish Crop Farms," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 68(1), March.
    8. Isaac Tweneboah Asante & Raymond K. Dziwornu & Dadson Awunyo-Vitor, 2020. "Hunger Project credit facility and maize productivity in Ghana," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 10(1), pages 239-258, June.
    9. repec:lic:licosd:37015 is not listed on IDEAS
    10. Pokrivčák, Ján & Tóth, Marián, 2022. "Financing Gap of Agro-food Firms and the Role of Policies," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 14(3), September.

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    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights

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