The investment behaviour of dairy farms in transition economies

Figures & data

Table 1. Descriptive statistics of dairy farms, 2007–2015 (euros at constant prices).

	Estonia
	Obs	Mean	Std. Dev.	Min	Max
${\left({\displaystyle \frac{I}{K}}\right)}_{t-1}$	2491	0.102	0.184	−0.890	1
${\left({\displaystyle \frac{CF}{K}}\right)}_{t-1}$	2491	0.056	0.289	−7.774	5.128
${\left({\displaystyle \frac{S}{K}}\right)}_{t-1}$	2491	0.383	0.604	0	24.600
${\left({\displaystyle \frac{D}{K}}\right)}_{t-1}$	2491	0.263	0.317	0	4.072
${\left({\displaystyle \frac{X}{K}}\right)}_t$	2491	0.026	0.094	0	1.851
	Hungary
${\left({\displaystyle \frac{I}{K}}\right)}_{t-1}$	1158	0.069	0.116	−0.535	0.818
${\left({\displaystyle \frac{CF}{K}}\right)}_{t-1}$	1158	0.143	0.123	−0.373	0.793
${\left({\displaystyle \frac{S}{K}}\right)}_{t-1}$	1158	0.381	0.216	−0.112	1.311
${\left({\displaystyle \frac{D}{K}}\right)}_{t-1}$	1158	0.169	0.171	0	1.009
${\left({\displaystyle \frac{X}{K}}\right)}_t$	1158	0.005	0.021	0	0.398
	Slovenia
${\left({\displaystyle \frac{I}{K}}\right)}_{t-1}$	438	0.061	0.104	−0.048	0.683
${\left({\displaystyle \frac{CF}{K}}\right)}_{t-1}$	438	0.088	0.132	−0.762	0.588
${\left({\displaystyle \frac{S}{K}}\right)}_{t-1}$	438	0.193	0.205	−0.007	1.994
${\left({\displaystyle \frac{D}{K}}\right)}_{t-1}$	438	0.014	0.043	0	0.407
${\left({\displaystyle \frac{X}{K}}\right)}_t$	438	0.016	0.048	0	0.400

Source: authors’ calculations based on FADN data for Estonia, Hungary and Slovenia.

Figure 1. Development of average investment subsidy per dairy farm in Estonia, Hungary and Slovenia, 2007–2015 (euros at constant prices). Source: authors’ calculations based on FADN data for Estonia, Hungary and Slovenia.

Table 2. Dynamic Panel Model (GMM-SYS) estimations.

	Estonia		Hungary		Slovenia
	Sub. (Cont.)	Sub. (Dum.)	Sub. (Cont.)	Sub. (Dum.)	Sub. (Cont.)	Sub. (Dum.)
${\left({\displaystyle \frac{I}{K}}\right)}_{i,t-1}$	0.034***	0.005	0.083***	0.091***	0.228***	0.286***
${\left({\displaystyle \frac{\mathit{I}}{\mathit{K}}}\right)}_{\mathit{i},\mathit{t}-1}^2$	0.004***	−0.000	0.209***	0.191***	−1.323***	−1.282***
${\left({\displaystyle \frac{CF}{K}}\right)}_{i,t-1}$	−0.038***	−0.040***	0.057*	0.063*	0.156***	0.142***
${\left({\displaystyle \frac{S}{K}}\right)}_{i,t-1}$	0.124***	0.118***	0.170***	0.159***	−0.012***	−0.007
${\left({\displaystyle \frac{\mathit{D}}{\mathit{K}}}\right)}_{\mathit{i},\mathit{t}-1}^2$	−0.016***	−0.013***	−0.298***	−0.275***	−0.279*	0.486***
${\left({\displaystyle \frac{X}{K}}\right)}_{i,t}$	0.466***		1.496***		1.132***
DXi,t		0.098***		0.094***		0.106***
constant	0.042***	0.054***	0.010	0.007	0.020***	0.000
N	2267	2267	962	962	327	327
P. AR(2)	0.2029	0.1255	0.8253	0.4360	0.8370	0.3384
P. Sarg	0.1706	0.2126	0.3473	0.4604	0.6132	0.6207
P. Ch^2	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000

Note: Sub. (Cont.) – subsidy as a continuous variable and Sub. (Dum.) – subsidy as a dummy variable. Outlier farms are farms for which the investment-to-capital ratio is above 99% in absolute terms. All explanatory variables except subsidy are divided by capital. N: number of observations. ***/**/*: statistically significant at the 1%, 5% and 10% levels, respectively.

Table 3. Dynamic Panel Model (GMM-SYS) estimations, with estimation on sub-samples for financial constrained and unconstrained dairy farms.

	Estonia		Hungary		Slovenia
	Sub. (Cont.)	Sub. (Dum.)	Sub. (Cont.)	Sub. (Dum.)	Sub. (Cont.)	Sub. (Dum.)
${\left({\displaystyle \frac{I}{K}}\right)}_{i,t-1}$	0.193***	0.195***	0.079***	0.078***	0.875***	0.179***
${\left({\displaystyle \frac{\mathit{I}}{\mathit{K}}}\right)}_{\mathit{i},\mathit{t}-1}^2$	0.091***	0.091***	0.224***	0.220***	−3.429***	−1.011***
${\left({\displaystyle \frac{CF}{K}}\right)}_{i,t-1}$	−0.140**	−0.144**	0.032	0.037	0.024	−0.099***
${\left({\displaystyle \frac{S}{K}}\right)}_{i,t-1}$	0.658***	0.667***	0.167***	0.170***	−0.077***	0.027
$z{\left({\displaystyle \frac{I}{K}}\right)}_{i,t-1}$	−0.397***	−0.401***	0.760*	0.472	−1.212***	−0.346***
$\mathit{z}{\left({\displaystyle \frac{\mathit{I}}{\mathit{K}}}\right)}_{\mathit{i},\mathit{t}-1}^2$	0.280***	0.285***	−4.137	−2.170	3.554***	0.767***
$z{\left({\displaystyle \frac{CF}{K}}\right)}_{i,t-1}$	0.115*	0.124**	0.254*	0.293*	0.198***	0.301***
$z{\left({\displaystyle \frac{S}{K}}\right)}_{i,t-1}$	−0.373***	−0.368***	−0.143	−0.171	0.073***	−0.021
$z{\left({\displaystyle \frac{X}{K}}\right)}_{i,t}$	0.223***		1.284***		1.395***
zDXi,t		0.067***		0.091***		0.094***
constant	−0.152***	−0.159***	−0.004	−0.012	0.020***	0.017***
N	2267	2267	962	962	327	327
P. AR(2)	0.1849	0.1796	0.6526	0.9454	0.2826	0.2099
P. Sarg	0.1578	0.1913	0.2315	0.3069	0.4408	0.3733
P. Ch^2	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000

Note: See notes for Table 2.

Figure A1. Proportion of gross fixed capital formation in agricultural output in Estonia, Hungary and Slovenia, 1998–2018. Source: authors’ calculation based on Eurostat (2020) data.

Figure A2. Proportion of investment grants in gross fixed capital formation in Estonia, Hungary and Slovenia, 1998–2018. Source: authors’ calculation based on Eurostat (2020) data.

Eurostat. (2020). Economic accounts for agriculture – values at current prices [aact_eaa01] (Accessed: 5.11.2020).

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