Determinants of Fixed Asset Investment in the Polish Farms

Elżbieta Jadwiga Szymańska,Michał Kruszyński,Mariusz Dziwulski

doi:10.3390/su132413741

Abstract

The aim of this study was to determine the factors affecting the level of investment activity of agricultural producers in Poland. Detailed studies included 4309 farms that kept accounts within the Farm Accountancy Data Network (FADN) accounting system in the years 2010–2018. The study uses Person’s linear correlation method, the multiple correlation method, and regression analysis. For the regression analysis, both static and dynamic models were applied. The level of expenditure on agricultural investment varied in the surveyed households and showed an upward trend during the years 2010–2018. Studies have shown that the investment activity of Polish farms largely depends on the possibility of raising funds from European Union programs dedicated, inter alia, to the development of agricultural holdings. The regression analysis demonstrated that the principal factors affecting the level of agricultural investment include: the amount of long-term liabilities, the family income of the farm, and the amount of investment subsidies. Preferential loans are an important parameter in a dynamic investment model. This study suggests that agricultural policy factors should be taken into account to ensure the appropriate development of Polish farms.

Highlights

Giuseppina Migliore, In a market economy and in the agricultural sector, the functioning of enterprises is associated with the continuous improvement of competitiveness, as well as the improvement of production efficiency
Meeting the requirements, which is an implication of the ongoing changes, requires taking actions that ensure the development of firms in the long term
Investments form an integral part of the process of both simple and extended reproduction, and they ensure the implementation of the principles of sustainable development in the practice of agricultural holdings

Summary

Introduction

Giuseppina Migliore, In a market economy and in the agricultural sector, the functioning of enterprises is associated with the continuous improvement of competitiveness, as well as the improvement of production efficiency. Meeting the requirements, which is an implication of the ongoing changes, requires taking actions that ensure the development of firms in the long term. These actions are based on investments in fixed assets. Equipping farms with production assets has a significant impact on their economic situation, and the structure of production assets determines their production capacity. It is important to adapt farm equipment to the current directions of production. Investments form an integral part of the process of both simple and extended reproduction, and they ensure the implementation of the principles of sustainable development in the practice of agricultural holdings

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Conclusion