Impact of credit constraints on profitability and productivity in U.S. agriculture

This study examines industry-level impacts of possible credit constraints on farm profitability and productivity. We theoretically show that binding credit-constraints negatively affects profits as they inhibit acquisition of the optimal scale and mix of inputs for profit maximization. However, the impact of credit constraints on productivity is ambiguous and depends on the farm’s production region (IRS or DRS). Empirically, current debt-to-asset ratio has a positive effect on TFP and a negative effect on profit.


Issue Date:
May 27 2015
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/205689
Total Pages:
24
Series Statement:
Paper
7380




 Record created 2017-04-01, last modified 2017-04-26

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