Determinants of investment expenditures : a sectoral analysis /
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| Other Authors: | , , |
| Format: | Thesis Book |
| Language: | English |
| Published: |
1994.
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| Subjects: | |
| Online Access: | Link to OAKTrust copy http://proxy.library.tamu.edu/login?url=http://proquest.umi.com/pqdweb?did=740812521&sid=1&Fmt=2&clientId=2945&RQT=309&VName=PQD |
| Abstract: | The objective of this study was to investigate the economic determinants of investment expenditures on farm equipment and structures. In addition, the existence and the nature of long run equilibrium relationships between the farm and nonfinancial corporate sectors were investigated. Investment expenditures on farm equipment and structures were found to be sensitive to alternative specifications of the cost of financial capital. Investment responses were found to be sensitive to shocks to key economic variables over the 1980-91 period. The econometric estimation of gross investment equations for investment expenditures on farm equipment and structures yielded mixed results. For equipment the results for the geometric decay and the engineering data capacity depreciation patterns were comparable. The results for structures, however, suggested that a geometric decay capacity depreciation pattern best described investment behavior. In the case of net investment, the engineering data pattern yielded better econometric fits of the data. Simulation of the econometric models within sample under alternative capacity depreciation patterns, indicated that the geometric decay pattern was more sensitive to shocks to key economic variables. Long run equilibrium relationships for investment expenditures on equipment were found to exist for both the farm and nonfinancial corporate sectors. The greater the number of cointegrating vectors the easier it is to exercise policy control between target and dependent variables. One cointegrating vector was found to hold the farm sector's investment system together while there were two cointegrating vectors associated with the nonfinancial corporate sector's investment system. The existence of these long run relationships can be attributed to lags in the timing and installation of new capital and economic forces minimizing the deviations in the long run steady state. For the farm sector, broader definitions of the financial cost of capital are necessary when conducting investment studies in agriculture. Choice of capacity depreciation patterns will influence the magnitude of investment responses to key policy variables. |
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| Item Description: | Vita. "Major subject: Agricultural Economics." |
| Physical Description: | xii, 108 leaves : illustrations ; 28 cm |
| Bibliography: | Includes bibliographical references. |