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Testing for the Presence of Financial Constraints in US Agricultural Cooperatives: An Investment Behaviour Approach
Author(s) -
Chaddad Fabio R.,
Cook Michael L.,
Heckelei Thomas
Publication year - 2005
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.2005.00027.x
Subject(s) - agriculture , investment (military) , constraint (computer aided design) , cash flow , panel data , economics , agribusiness , finance , capital investment , capital (architecture) , cash , business , monetary economics , agricultural economics , econometrics , mechanical engineering , history , ecology , archaeology , politics , political science , law , biology , engineering
This study examines the presence of financial constraints in US agricultural cooperatives. We test the cooperative capital constraint hypothesis with a panel data econometric analysis of agricultural cooperatives’ investment behaviour. Regression results suggest that agricultural cooperatives’ capital expenditures are significantly affected by the availability of internal funds. Results also indicate that the sensitivity of investment to cash flow is correlated with cooperative structural characteristics.