What determines investment rate of Polish large-sized farms?

There is a set of various factors affecting farm investment behavior (in result, IR) inter alia economic variables (factor markets and public policy), farmer’s attitudes and socio-demographic features. The paper aims to identify determinants of IR of Polish large-sized farms (>100 hectares of arable area). The empirical studies based on a random sample of large-scale farms surveyed annually by IAFE-NRI (the processed research sample consisted of 25 entities annually). The research period covered years 2007-2011 because of data availability. First, we used panel models (both REM and FEM) with explanatory variables (proposed in the literature, including lagged variables) including investment subsidies. Then, we switched form unsatisfactory panel models to a GLS model approach. Our results indicated that a shift toward a strong specialization may weaken the propensity to invest at large-scale farms. The effect of EU investment subsidies was particularly evident after 1 year. The importance of diversification from the standpoint of market-oriented large-sized farms should not be neglected. The accumulated experience and knowledge of farm operators may stimulate the investment activity. The significance of farm operator’s characteristics should be a prerequisite for life-long education.

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Journal Article
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Published in:
Business and Economic Horizons, Volume 11, Issue 3
Business and Economic Horizons
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JEL Codes:
G31; H25; Q14

 Record created 2017-04-01, last modified 2017-05-02

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