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The effect of soft budget constraint and credit-market imperfections on investments in Hungarian agriculture

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Ferto I., Bakucs L. Z., Fogarasi J.
Kozgazdasagi Szemle (Economic Review)
|
2007
|
vol. 54
|
issue 4
322-333
EN
The study uses econometric methods to examine imperfections in Hungarian agriculture in the 2001-5 period. The findings confirm the presence of credit-market imperfections in the whole sample examined. Financing constraints are faced by farms with a low stock of debt, mainly farming rented land. Further calculations show the presence of softness of the budget constraint on highly indebted agricultural firms.
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