Agric. Econ. - Czech, 2015, 61(8):343-355 | DOI: 10.17221/250/2014-AGRICECON

Impacts of the government-supported investments on the economic farm performance in AustriaOriginal Paper

Stefan KIRCHWEGER, Jochen KANTELHARDT, Friedrich LEISCH
Institute of Agricultural and Forestry Economics at the University of Natural Resources and Life Sciences, Vienna, Austria

Farm investments in the European Union are supported by the governmental programmes. The evaluation of this programme is challenged through the voluntary participation and heterogeneous observation units. Therefore, we combine the Matching Method with the Difference-in-Difference estimation in order to overcome these problems and to estimate the impact of supported farm-investment activities on the economic performance of the Austrian farm holdings. In particular, we detect an increase in production, land renting and capital borrowing. Furthermore, a shift from the non-farm to farm activities, but with no statistically significant impact on the total income is shown.

Keywords: farm-investment support programme, selection bias, matching, conditional Difference-in-Difference estimation

Published: August 31, 2015  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
KIRCHWEGER S, KANTELHARDT J, LEISCH F. Impacts of the government-supported investments on the economic farm performance in Austria. Agric. Econ. - Czech. 2015;61(8):343-355. doi: 10.17221/250/2014-AGRICECON.
Share...
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. Atzeni G.E., Carboni O.A. (2008): The effects of grant policy on technology investment in Italy. Journal of Policy Modeling, 30: 381-399. Go to original source...
    2. Augurzky B., Kluve J. (2007): Assessing the performance of matching algorithms when selection into treatment is strong. Journal of Applied Econometrics, 22: 533-557. Go to original source...
    3. Bergschmidt A. (2009): Powerless evaluation. EuroChoices, 8: 37-42. Go to original source...
    4. Bergschmidt A., Dirksmeyer W., Efken J., Forstner B., Uetrecht I. (eds) (2006): Proceedings of the European Workshop on the Evaluation of Farm Investment Support, Investment Support for Improvement of Processing and Marketing of Agricultural Products. Arbeitsberichte des Bereichs Agrarökonomie, No. 03/2006; Thünen Instiut, Braunschweig.
    5. Bernini C., Pellegrini G. (2011): How are growth and productivity in private firms affected by public subsidy? Evidence from a regional policy. Regional Science and Urban Economics, 41: 253-265. Go to original source...
    6. Blanford D. (2006): Pressures for adjustment in the agricultural sectors of developed countries. In: Blanford D., Hill B. (eds): Policy Reform and Adjustment in the Agricultural Sectors of Developed Countries. Cromwell Press Ltd., Trowbridge: 43-54. Go to original source...
    7. Brady H.E. (2008): Causation and explanation in social science. In: Box-Steffensmeier J.M., Brady H.E., Collier D. (eds): The Oxford Handbook of Political Methodology. Oxford University Press, Oxford: 217-270. Go to original source...
    8. Bronzini R., de Blasio G. (2006): Evaluating the impact of investment incentives: The case of Italy's Law 488/1992. Journal of Urban Economics, 60: 327-349. Go to original source...
    9. Caliendo M., Kopeinig S. (2008): Some practical guidance for the implementation of propensity score matching. Journal of Economic Surveys, 22: 31- 72. Go to original source...
    10. Cerqua A., Pellegrini G. (2014): Do subsidies to private capital boost firms' growth? A multiple regression discontinuity design approach. Journal of Public Economics, 109: 114-126. Go to original source...
    11. Conniffe D., Gash V., O'Connell P.J. (2000): Evaluating state programmes: "Natural experiments" and propensity scores. Economic and Social Review, 31: 283-308.
    12. Cook T.D., Shadish W.R., Wong V.C. (2008): Three conditions under which experiments and observational studies produce comparable causal estimates: New findings from within-study comparisons. Journal of Policy Analysis and Management, 27: 724-750. Go to original source...
    13. Cook T.D., Steiner P.M., Pohl S. (2009): How bias reduction is affected by covariate choice, unreliability, and mode of data analysis: Results from two types of within-study comparisons. Multivariate Behavioral Research, 44: 828-847. Go to original source... Go to PubMed...
    14. Duch N., Montolio D., Mediavilla M. (2009): Evaluating the impact of public subsidies on a firm's performance: a two-stage quasi-experimental approach. Investigaciones Regionales, 16: 143-156.
    15. EC (2005): Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD). Official Journal of the European Union. Available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32005R1698&qid=1398775467048 (accessed March 2014).
    16. EC (2010): The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, 672. Available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0672:FIN:en:PDF (accessed March 2014).
    17. EC (2011): Rural Development in the European Union. Statistical and economic information. (Directorate-General for Agriculture and Rural Development).
    18. Escalante C.L., Barry P.J. (2003): Determinants of the strength of strategic adjustments in farm capital structure. Journal of Agricultural and Applied Economics, 35: 67-78. Go to original source...
    19. Forstner B., Bergschmidt A., Dirksmeyer W., Ebers H., Fitschen-Lischewski A., Margarian A., Heuer J. (2009): Ex-Post-Bewertung des Agrarinvestitionsförderungsprogramms (AFP) für den Förderzeitraum 2000 bis 2006. (Ex-post evaluation of the German farm-investment support programme from 2000-2006.) Länderübergreifender Bericht 98, Thünen Institut, Braunschweig.
    20. Harris R., Trainor M. (2005): Capital subsidies and their impact on total factor productivity: Firm-level evidence from Northern Ireland. Journal of Regional Science, 45: 49-74. Go to original source...
    21. Heckman J., Ichimura H., Smith J., Todd P. (1998): Characterizing selection bias using experimental data. Econometrica, 66: 1017-1098. Go to original source...
    22. Heißenhuber A., Kantelhardt J., Osinski E. (2001): Ökonomische Aspekte einer ressourcen schonenden Landnutzung. (Economic aspects of a resource-saving land use.) In: Beiträge zur Entwicklung ökologisch und ökonomisch nachhaltiger Landnutzungssysteme in Agrarlandschaften. (In: Contributions to the development of ecologically and economically sustainable land-use systems in agricultural landscapes.) Agrarspektrum 31: 20-30.
    23. Heißenhuber A., Kantelhardt J., Schaller J., Magel H. (2004): Visualisierung und Bewertung ausgewählter Landnutzungsentwicklungen. (Visualisation and valuation of selected land use dynamics.) Natur und Landschaft: Zeitschrift für Naturschutz und Landschaftspflege, 79: 159-166.
    24. Ho D.E., Imai K., King G., Stuart E.A. (2007): Matching as nonparametric preprocessing for reducing model dependence in parametric causal inference. Political Analysis, 15: 199-236. Go to original source...
    25. Imbens G.W., Wooldridge J.M. (2009): Recent developments in the econometrics of program evaluation. Journal of Economic Literature, 47: 5-86. Go to original source...
    26. Kirchweger S., Kantelhardt J. (2012): Improving Farm Competitiveness through Farm-Investment Support: a Propensity Score Matching Approach. In: 131st Seminar European Association of Agricultural Economists, Sept. 18-19, 2012, Prague. Available at http://purl.umn. edu/135791 (accessed March 2014).
    27. Kirchweger S., Kantelhardt J. (2014): Structural Change and Farm Investment Support in Austria. In: 88 th Annual Conference of the Agricultural Economics Society, April 9-11, 2014, AgroParisTech, Paris. Available at http://purl.umn.edu/170545 (accessed March 2014).
    28. MacDonald D., Crabtree J.R., Wiesinger G., Dax T., Stamou N., Fleury P., Gutierrez Lazpita J., Gibon A. (2000). Agricultural abandonment in mountain areas of Europe: Environmental consequences and policy response. Journal of Environmental Management, 59: 47-69. Go to original source...
    29. Margarian A. (2012): The relation between agricultural and non-agricultural economic development: Technical report on an empirical analysis of European regions. Thuenen Working Papers. Available at http://purl.umn. edu/126870 (accessed March 2014).
    30. Medonos T., Ratinger T., Hruska M., Spicka J. (2012): The assessment of the effects of investment support measures of the Rural Development Programmes: the case of the Czech Republic. Agris on-line Papers in Economics and Informatics, 4: 35-48.
    31. Michalek J. (2012): Counterfactual impact evaluation of EU rural development programmes - Propensity Score Matching methodology applied to selected EU Member States. Vol. 1: A micro-level approach. Joint Research Centre, Institute for Prospective Technological Studies, European Commission, Luxembourg.
    32. Morgan S.L., Winship C. (2010): Counterfactuals and Causal Inference: Methods and Principles for Social Research. Cambridge University Press, New York.
    33. Pufahl A., Weiss C.R. (2009): Evaluating the effects of farm programmes: results from propensity score matching. European Review of Agricultural Economics, 36: 79-101. Go to original source...
    34. Rosenbaum, P.R. (2005): Heterogeneity and Causality. The American Statistician, 59: 147-152. Go to original source...
    35. Rosenbaum P.R. (2010): Design of Observational Studies. Springer-Verlag, New York. Go to original source...
    36. Rosenbaum P.R., Rubin D.B. (1985): Constructing a Control group using multivariate matched sampling methods that incorporate the propensity score. The American Statistician, 39: 33-38. Go to original source...
    37. Rubin D.B. (1977): Assignment to treatment group on the basis of a covariate. Journal of Educational Statistics, 2: 1-26. Go to original source...
    38. Sekhon J.S. (2009): Opiates for the matches: matching methods for causal inference. Annual Review of Political Science, 12: 487-508. Go to original source...
    39. Sekhon J.S. (2011): Multivariate and propensity score matching software with automated balance optimization: The matching package for R. Journal of Statistical Software, 42: 1-52. Go to original source...
    40. Smith J.A., Todd P.E. (2005): Does matching overcome LaLonde's critique of nonexperimental estimators? Journal of Econometrics, 125: 305-353. Go to original source...
    41. Theuvsen L. (2007): Pachtpreisanpassungsklauseln: Ein Beitrag zum Risikomanagement landwirtschaftlicher Betriebe? (Land-rent adjustment clauses: A contribution to the risk management of agricultural holdings) German Journal of Agricultural Economics, 56: 337-339. Go to original source...
    42. Viaggi D., Raggi M., Paloma S.G.y. (2011): Understanding the determinants of investment reactions to decoupling of the Common Agricultural Policy. Land Use Policy, 28: 495-505. Go to original source...

    This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International (CC BY NC 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content