Work

Impact of debt structure on production efficiency and financial performance of B roadacre farms in W estern A ustralia

Year: 2014

Type: article

Abstract: Farming activities are often financed using debt, yet empirical studies investigating the relationship between farm debt structure and performance are still rare. Using a 10 year unbalanced panel of Broadacre farms in Western Australia, we relate the impact of long‐term debt, short‐term debt and tax liability on farm performance measured by input‐oriented technical efficiency and return on assets. We find farm technical efficiency is positively related to short‐term debt, tax liability and capital investment, but negatively related to off‐farm income generating activities. Long‐term debt has no effect on production efficiency and return on assets. These results are robust to both parametric and nonparametric methods of estimation.

Source: Australian Journal of Agricultural and Resource Economics

DOI: 10.1111/1467-8489.12075

Authors: Amin W. Mugera, Gerald G. Nyambane

Institutions: The University of Western Australia, Davenport University

Language: English

Topic: Agricultural economics and policies

Subfield: Safety Research

Field: Social Sciences

Domain: Social Sciences

SDG: Zero hunger

Open Access status: bronze

OpenAlex ID: W2048835157

FWCI: 4.655

Cites: 22

Cited by: 41

Related to: 10