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The Impacts of Farm Financial Structure on Production Efficiency

Published online by Cambridge University Press:  28 April 2005

David K. Lambert
Affiliation:
Department of Agribusiness and Applied Economics, North Dakota State University, Fargo, ND
Volodymyr V. Bayda
Affiliation:
Department of Agribusiness and Applied Economics, North Dakota State University, Fargo, ND

Abstract

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.

Type
Articles
Copyright
Copyright © Southern Agricultural Economics Association 2005

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