While recent research into foreign direct investment (FDI) has focused on examining the importance of institutions, corruption, money laundering, and tax havens, the role of globalization on FDI has ...not yet been explored. This research investigates the impacts of globalization on outward FDI. We find that both overall globalization and its economic and social dimensions significantly positively influence outward FDI flows. We also demonstrate that beyond the level of globalization, corruption, money laundering, and the status of a country as a tax haven, cross-country similarity also plays an important role. Accordingly, policies specifically designed to increase the transparency of outward FDI flows should be required to address money laundering and the existence of tax havens.
Purpose
The literature argues on ambiguous impacts of different types of the common agricultural policy (CAP) subsidies on farm technical efficiency (TE). The purpose of this paper is to estimate and ...analyse the TE and the impact of the CAP subsidies on the TE of wine farms in Hungary using the farm accountancy data network data set in the period 2013–2019.
Design/methodology/approach
The authors use stochastic frontiers analysis (SFA) models to estimate the TE scores for the Hungarian wine farms with four wine farm-level inputs in terms of agricultural land, labour, capital and intermediate consumption. The TE scores are explained by the CAP subsidies and economic wine farm size. The different SFA models were applied with robustness tests to investigate the drivers of the TE values of wineries.
Findings
Like for Hungarian farms in general, the distribution of the wine farm structure is a dual with a greater number of smaller wine farms and a smaller number of bigger wine farms. The agricultural land, capital and intermediate consumption are significantly positively associated with the wine farm TE. With higher capital intensity wine farm TE increase. The results imply that the CAP subsidies decrease the TE of the Hungarian wine farms, whereas economic farm size increase.
Originality/value
To the best of the authors’ knowledge, this is one of the first specific efficiency studies on the wine sector in the Central and Eastern European region and the first one for Hungary to evaluate the TE at wine farm level and to assess the impact of CAP subsidies and economic farm size on wine farm (in)efficiency to apply production technologies and use farm resources. This study is among the first that applied the fixed-effects stochastic frontier model at the wine farm level to measure the drivers of the TE scores.
PurposeThe purpose of this study is to explore the determinants of investment decisions of Estonian farms after the transition to market economy and accession to the European Union (EU), in the ...period 2006–2019.Design/methodology/approachThe paper employs Estonian Farm Accountancy Data Network (FADN) individual farm-level data from the period 2006–2019, and standard and augmented accelerator investment models. Generalised methods of moments (GMM) and bias-corrected least-squares dummy variables (LSDVC) regressions were used to estimate parameters of these models.FindingsIn the considered period, farm investments were positively affected by sales growth, investment subsidies and the cash flow. Decomposition of cash flow into volatile, market income related part, and more stable, farm subsidies related part indicated that investments do not depend on market income part of cash flow. Instead, the stable part of the cash flow (farm subsidies) had a significant and positive effect on investments. This suggests that credit rationing could be present in the EU agriculture, and it depends on the farm subsidies not market income of farms.Originality/valueDespite the wealth of literature on the investment behaviour of farmers, this article is the first attempt to decompose farm cash flow into stable (farm subsidies) and volatile (market income) parts to explain the role of subsidies as a part of cash flow in credit rationing.
Hungarian agriculture is expected to experience greater risks due to more variability in crop productivity due to increasing yearly average temperatures and extreme precipitation patterns. This study ...investigates the effect of changing climatic conditions on productivity, using a Hungarian sample of crop producers for a 12-year time period. Our empirical analysis employs True Fixed Effects frontier models of Farm Accountancy Data Network data that are merged with specific meteorological data representatively maintained for seeding, vegetative, and generative periods for cereals, oil seed and protein crops, along with soil quality and usage-related data. Estimations indicate that climate variables have significant impacts on technical efficiency. In addition, calculation suggest that an increase in temperature during seeding and vegetative periods, combined with higher precipitation levels in May and June, will reduce crop farmers’ production frontier. Estimations explain the variance, while the technical efficiency (TE) scores emphasize the impact of the difference in soil quality and its water absorption capacity.
While the positive effect of economic integration on trade is commonly accepted, we still lack a proper understanding of the complex patterns behind this phenomenon. In particular, it is important to ...better understand how the structure of trade linkages evolves. To advance our knowledge about this matter, we test two specific predictions that originate from the recent literature on network effects in trade relations: (1) that the size of an initial trade network is positively correlated with building new trade linkages; (2) that the evolution of a trade network in a given country depends on the trade network of its trading partners. Using data related to intra‐EU trade in dairy products between 2001 and 2015, we find support for both these predictions.
This paper studies the validity of Gibrat's law for the growth of Slovenian farms between 2007 and 2015 using Farm Accountancy Data Network datasets. Cross-sectional dependence test and four ...different groups of panel unit root tests are applied to study the relationship between farm size and the farm size growth. It revealed evidence of cross-sectional dependence in farm sizes. Both input (land and labour) and output (economic) sizes of variables as proxy for the measures of farm size are applied. The results suggest that Gibrat's law is valid for Slovenian farms independently from the measures of farm size and types of panel unit root tests. Slovenian smaller farms are not growing faster than larger ones and thus all farm sizes tend to contribute to an increase in average farm size in generally relatively small- to medium-size farm structures.
This paper examines the impact of EU enlargement on agro‐food export performance across 12 new EU member states and five newly independent states in the EU markets covering the period 1999 to 2007. ...The performance is examined by duration of export and hazard model. We find larger duration for the agro‐food exports from the new EU member states. The results confirm gains from the eastward EU enlargement and governance on export increases and longer duration for exporting higher value‐added specialized consumer‐ready food and more competitive niche agro‐food products.
The complementarities of trade advantage and trade competitiveness measures for agro food trade of five Central European (CE-5) countries with the European Union are analysed. The stability and ...duration of the trade measures over time is investigated by the survival analysis using the nonparametric Kaplan-Meier product limit estimator, and the consistency test between the trade measures is conducted by the stratified Cox proportional hazard model. The CE-5 countries experienced a greater number of products with relative trade disadvantages and greater significance of one way imports. Unlike the Czech Republic, Poland, Slovakia and Slovenia, Hungary experienced Relative Trade Advantages (RTAs) for bulk raw commodities, processed intermediates and horticulture, with the greatest significance of successful quality competition and one-way exports, and the lowest significance of unsuccessful price and unsuccessful quality competition. The duration of RTAs is longer than the duration for the successful trade competition categories. Our results confirm that the RTA is consistent with the one way export and the successful price and successful quality competition categories in two way trade on one side, and the relative trade disadvantage with the one way import and the unsuccessful price and unsuccessful quality competition on the other.
Since the collapse of the communist system, regional inequalities have increased in Central European Countries. This paper describes an assessment of the impacts of regional development programmes on ...the development of Hungarian regions at a highly disaggregated level between 2002 and 2008. We construct a multi-dimensional composite indicator to estimate the overall development of rural regions and capture social, economic and environmental dimensions. The impacts of rural development programmes were investigated through counterfactual analysis in combination with Propensity Score Matching and Difference-in-Differences approaches. There has been considerable variation with increasing concentration in the level of subsidies distributed during the analysed period. From a policy perspective, the results are disappointing. Irrespective of the subsidy measures or methodology employed, the impact of the former is very close to zero or non-significant. Our findings cast serious doubt on the effectiveness of development policy and the long-run convergence of European regions.
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