The Impacts of Farm Financial Structure on Production Efficiency

Farm financial structure may affect both short- and long-run input usage, thereby affecting farm efficiency. Any inefficiencies arising from the choice of inputs can be magnified over time as credit constraints continue to affect input usage. In a panel of 54 North Dakota crop farms, efficiency and debt structure were related. Intermediate debt was found to be positively related to farm technical efficiency, and short-term debt was negatively associated with technical efficiency. Use of intermediate-term debt was positively associated with farm-scale efficiency, whereas no significant relationship was found between short- and long-term debt and scale efficiency.

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Journal Article
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Journal of Agricultural and Applied Economics, 37, 1
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JEL Codes:
Q1; Q12; Q16

 Record created 2017-04-01, last modified 2020-10-28

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