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Article
Publication date: 1 August 1997

Adeyemi Aderoba

Gradual phasing out of manual methods through sequential substitution of machines may well represent the only viable manufacturing strategy option for many job shops particularly…

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Abstract

Gradual phasing out of manual methods through sequential substitution of machines may well represent the only viable manufacturing strategy option for many job shops particularly in developing countries. For such job shop projects with limited capital, investment in buildings and machines needs to be phased so as to benefit from added capital from reinvested earnings. Describes a dynamic integer model suitable for such investment scheduling. Suggests that the model was solved with a readily implementable heuristic which employs suitable decision rules for scheduling machinery purchases and factory space construction in modular units. The model will find ready application in emerging job shop projects of many developing countries.

Details

Integrated Manufacturing Systems, vol. 8 no. 4
Type: Research Article
ISSN: 0957-6061

Keywords

Article
Publication date: 3 April 2017

Shanmugam Muthu

The purpose of this paper is to examine the crowding-in or crowding-out relationship between public and private investment in India.

Abstract

Purpose

The purpose of this paper is to examine the crowding-in or crowding-out relationship between public and private investment in India.

Design/methodology/approach

The autoregressive distributed lag (ARDL) bounds testing approach is used to estimate the long run relationship between public and private investment using annual data from 1971-1972 to 2009-2010.

Findings

Based on the empirical findings, it is observed that aggregate public investment has a positive effect on private investment both in the long run and the short run. In contrast to the findings of previous studies, no significant impact of public infrastructure investment on private investments is found in the long run, while non-infrastructure investment has a positive impact on private investment in the short run. Among the various categories of infrastructure sector, a positive and significant impact in the case of electricity, gas and water supply is observed. Similarly, the result indicates that public investment in machinery and equipment and construction have substantially influenced the private sector machinery and equipment in the long run and the short run. In the case of the role of macroeconomic uncertainty, the results find a negative and significant impact on private investment and the impact is higher in the short run than in the long run.

Originality/value

The present study extends the literature in three important ways: First, the study attempts to capture heterogeneity of public investment as well as disaggregate effects of two different categories of public infrastructure on private investment. The extent to which two different types of public assets impact the private investment in machinery and equipment investment is also examined. Second, ARDL model is used to examine the long-run relationship between public and private investment. Third, the study incorporates macroeconomic uncertainty into the empirical analysis to examine the role of macroeconomic volatility in determining private investment decision.

Details

Journal of Financial Economic Policy, vol. 9 no. 1
Type: Research Article
ISSN: 1757-6385

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Article
Publication date: 4 July 2016

James M Williamson and Sarah Stutzman

– The purpose of this paper is to estimate the impact of Internal Revenue Code cost recovery provisions – Section 179 and “bonus depreciation” – on farm capital investment.

Abstract

Purpose

The purpose of this paper is to estimate the impact of Internal Revenue Code cost recovery provisions – Section 179 and “bonus depreciation” – on farm capital investment.

Design/methodology/approach

The authors construct a synthetic panel of data consisting of cohorts of similar farms based on state and production specialization using the USDA’s Agricultural Resource Management Survey for years 1996-2012. Employing panel data methods, the authors are able to control for time-invariant fixed effects, as well as the effects of past investment on current investment.

Findings

The authors estimate statistically significant investment demand elasticities with respect to the Section 179 expensing deduction of between 0.28 and 0.50. A change in bonus depreciation, on average, had little impact on capital investment.

Practical implications

The estimates suggest there is a modest effect of the cost recovery provisions on investment overall, but a stronger effect on farms that have more than $10,000 in gross cash farm income. There are other implications for the agricultural sector: the provisions may encourage technology adoption with its associated benefits, such as reduced cost of production and improved conservation practices. On the other hand, the policy could contribute to the growing concentration in production as large commercial farms expand their operated acreage to take advantage of increasingly efficient physical capital.

Originality/value

To the authors’ knowledge, this is the first research to use a nationally representative dataset to estimate to impact of Section 179 and “bonus depreciation” on farm investment. The findings provide evidence of the provisions’ impact on farm capital purchases.

Details

Agricultural Finance Review, vol. 76 no. 2
Type: Research Article
ISSN: 0002-1466

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Article
Publication date: 18 April 2018

Leonard Polzin, Christopher A. Wolf and J. Roy Black

The purpose of this paper is to examine the use of accelerated depreciation deductions, which includes Section 179 and bonus depreciation, taken in the first year of asset life by…

Abstract

Purpose

The purpose of this paper is to examine the use of accelerated depreciation deductions, which includes Section 179 and bonus depreciation, taken in the first year of asset life by Michigan farms. The frequency, value and influence of accelerated depreciation on farm investment are also analyzed.

Design/methodology/approach

Accrual adjusted income statements, balance sheets, depreciation schedules, and income tax information for 66 Michigan farms from 2004 to 2014 provide data for the analysis. The present value of the accelerated deduction and change in the cost of capital were calculated. Finally, investment elasticities were used to arrive at the change in investment due to accelerated depreciation.

Findings

Accelerated depreciation was utilized across all applicable asset classes. Section 179 was used more often than bonus depreciation in part because it was available in all the examined years. Based on actual farm business use, accelerated depreciation lowered the cost of capital for the operations resulting in an estimated increase in investment of 0.27 to 11.6 percent depending on asset class.

Originality/value

The data utilized are of a detail not available in previous investigations which used either aggregate data or estimated rather than the observed use of accelerated depreciation. This analysis reveals that accelerated depreciation as used by commercial farms lowers the cost of capital and thus encourages investment particularly in machinery and equipment.

Details

Agricultural Finance Review, vol. 78 no. 3
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 21 September 2021

Zhigang Chen, Ying Zhang and Li Zhou

Finance is crucial to boosting agricultural development in developing countries. This paper aims to investigate the effects of rural formal and informal financial access on…

Abstract

Purpose

Finance is crucial to boosting agricultural development in developing countries. This paper aims to investigate the effects of rural formal and informal financial access on agricultural technical efficiency (TE) in China.

Design/methodology/approach

Based on the survey data of demonstrative family farms in Langxi county, Anhui province and Wuhan city, Hubei province in central China in 2017, this research assesses agricultural TE by using a three-stage DEA model. It adopts the tobit model to evaluate the effects of formal and informal financial access on TE, and to explore the heterogeneous effects by types, management states and scales. It uses the OLS regression and PSM method to check the robustness, and applies the IV-Tobit method to solve the endogeneity. The authors apply the mediation effect model to explore the channels through which financial access impacts TE.

Findings

Family farms' average TE reaches 13.9%, which shows much room for improvement under the given technical conditions and constant inputs. The research confirms the advantage of formal financial access in raising TE relative to informal financial access. The heterogeneous analysis documents more prominent effects of formal financial access on enhancing TE of aquaculture, hybrid, demonstration and large farms. The mediating effect model reveals that the enhancing TE effect of formal financial access derives from improved machinery investment and family labor division rather than land circulation.

Originality/value

The research clarifies finance into formal and informal finance. The results have considerable policy implications for rural financial policies in China.

Details

China Agricultural Economic Review, vol. 14 no. 1
Type: Research Article
ISSN: 1756-137X

Keywords

Content available
Article
Publication date: 1 October 1999

107

Abstract

Details

Aircraft Engineering and Aerospace Technology, vol. 71 no. 5
Type: Research Article
ISSN: 0002-2667

Keywords

Article
Publication date: 4 September 2017

Sergio-Andres Pulgarin-Molina, Andres Mauricio Castro, Alejandra Ballesteros and Juan Manuel Barrera

This paper aims, first, to advance the current understanding about the impact of innovation in non-traditional exports, and, second, to provide insights about the structure of…

Abstract

Purpose

This paper aims, first, to advance the current understanding about the impact of innovation in non-traditional exports, and, second, to provide insights about the structure of emergent economies often not regarded by traditional innovation and export theories.

Design/methodology/approach

A longitudinal analysis using panel data based on Box Jenkins’ theory was conducted, so to identify statistically significant variables on export performance, regarding expenditure on research, development and innovation (R&D + I) activities, ICT and specialized training and formation.

Findings

This study suggests the need to design public policies aimed at stimulating innovation in potential export sectors, as a mechanism for competitive development and growth in emergent economies such as Colombia.

Originality/value

The introduction of innovations in goods and services exports has become more important in economies, such as the Colombian ones, where globalization openness processes force to establish minimum competitiveness levels regarding the international standards.

Details

International Journal of Innovation Science, vol. 9 no. 3
Type: Research Article
ISSN: 1757-2223

Keywords

Article
Publication date: 24 November 2017

Sarah Anne Stutzman

The purpose of this paper is to examine the impact of changes in farm economic conditions and macroeconomic trends on US farm capital expenditures between 1996 and 2013.

Abstract

Purpose

The purpose of this paper is to examine the impact of changes in farm economic conditions and macroeconomic trends on US farm capital expenditures between 1996 and 2013.

Design/methodology/approach

A synthetic panel is constructed from Agricultural Resource Management Survey (ARMS) data. A dynamic system GMM regression model is estimated for farms as a whole and separately within farm typology categories. The use of farm typologies allows for comparison of the relative magnitudes of these estimates across farms by farm sales level and the operator’s primary occupation.

Findings

Changes in gross farm income levels, tax depreciation rates, and interest rates have a significant impact on crop farm investment, while changes in output prices, net cash farm income levels, tax depreciation rates, and farm specialization levels have significant impacts on livestock farm capital investment. The relative significance and magnitudes of these impacts differ within farm typologies. Significant differences include a greater responsiveness to change in tax policy variables for residential crop farms, greater responsiveness to changes in output prices and debt to asset ratios for intermediate livestock farms, and larger changes in commercial crop and livestock farm investment given equivalent changes in farm sales or the returns to investment.

Research limitations/implications

These findings are of interest to agricultural economists when constructing farm investment models and employing pseudo panel methods, to those in the agricultural equipment and manufacturing sector when constructing models to manage inventories and plan for production needs across regions and over time, to those involved in drafting tax policy and evaluating the potential impacts of tax changes on agricultural investment, and for those in the agricultural lending sector when designing and executing agricultural capital lending programs.

Originality/value

This study uniquely identifies differences in the level of investment and the magnitude of investment responsiveness to changes in farm economic conditions and macroeconomic trends given differences in income levels and primary operator occupation. In addition, this study is one of the few which utilizes ARMS data to study farm capital investment. Utilizing ARMS data provides a rich panel data set, covering producers across many different crop production types and regions. Finally, employing pseudo panel construction methods contributes to efforts to effectively employ cross-sectional data and dynamic models to study farm behavior across time.

Details

Agricultural Finance Review, vol. 78 no. 1
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 6 May 2020

Eric Ofori, Terry Griffin and Elizabeth Yeager

Precision technologies have been available at the farm level for decades. Some technologies have been readily adopted, while the adoption of other technologies has been slower…

Abstract

Purpose

Precision technologies have been available at the farm level for decades. Some technologies have been readily adopted, while the adoption of other technologies has been slower. The purpose of this study is to examine the factors influencing farmers' time-to-adoption decisions as duration between year of commercialization of precision agriculture (PA) technologies and year of adoption, at the farm level.

Design/methodology/approach

Time-to-adoption, which is the difference in years between technologies becoming commercially available and the year of adoption was determined using non-parametric duration analysis, and the impact of specific farm/farmer characteristics on time-to-adoption were estimated using a semi-parametric Cox proportional-hazard (CPH) model, based on a panel dataset of 316 Kansas farms from 2002 to 2018.

Findings

The findings indicate that, time-to-adoption for embodied-knowledge technologies such as automated guidance and section control were statistically shorter than for information-intensive technologies such as yield monitors, precision soil sampling and variable rate fertility. Duration was indirectly (directly) proportional to commercialization date of embodied-knowledge (information-intensive) technology. More so, time-to-adoption statistically differed among technologies within these two broad categories. Time-to-adoption varies across farm location and between both types of technologies. Millennial farmers are more likely to adopt both types of technologies sooner compared to baby boomers. Net farm income, percentage changes in debt-to-asset ratio, corn to total crop acres and machinery investment had no significant impact on the time-to-adoption for both information-intensive and embodied-knowledge technologies. On the other hand, while variations exist, time-to-adoption of PA technologies is mainly driven by location of farm, generation of farmer, number of workers, years of farming experience, total acres cropped and the cost of crop insurance.

Originality/value

This study investigates how the financial position of farms, amongst other important factors might influence time-to-adoption of PA technologies. Results are useful to extension personnel and retailers for planning marketing or farm outreach programs taking into consideration that, time-to-adoption differs across regions and by specific characteristics, key amongst them: generation of farmer, number of workers, years of farming experience, total acres cropped and the cost of crop insurance.

Details

Agricultural Finance Review, vol. 80 no. 5
Type: Research Article
ISSN: 0002-1466

Keywords

Book part
Publication date: 13 June 2023

Enas Moustafa Mohamed Abousafi, Mohamed Abouelhassan Ali and Jose Louis Iparraguirre

This chapter applies the five drivers of productivity framework to regional microdata for Egypt and extends it by introducing an index of industrial clusters as an explanatory…

Abstract

This chapter applies the five drivers of productivity framework to regional microdata for Egypt and extends it by introducing an index of industrial clusters as an explanatory factor of the productivity performance of local private sector firms. Applying structural equation models, the geographic concentration of sectoral economic activity is found to have a positive and statistically significant effect on labor productivity. The transmission mechanism is conjectured to be the positive spillovers that are created, which local firms can tap into. In contrast, a higher concentration of skilled workers in an industrial sector in a region is associated with lower levels of labor productivity – a finding that suggests there may be structural deficiencies in the allocation of skilled workers. Regional policy should focus on net investments in gross capital formation throughout the country, for which the national and regional governments should improve how public investments are managed and the institutional framework – including the rule of law, bureaucracy and red tape, conflict of interest, transparency, and governance – so that private investment (both local and foreign) may substantially increase.

Details

Industry Clusters and Innovation in the Arab World
Type: Book
ISBN: 978-1-80262-872-2

Keywords

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