In the paper, an econometric model is proposed to test the risk balancing hypothesis using farm level data. For the purpose, a constraint on expected utility maximization with respect to farm financial structure is given. Cluster method is applied to pick out the farms on the efficient frontier...

This study examines credit score migration rates of farm businesses. We test whether migration probabilities differ across business cycles. Our results suggest that agricultural credit ratings are more likely to improve during expansions and deteriorate during recessions. We also test whether...

Numerous empirical studies in the finance field have tested many theories for firms¡¦ capital structure. Under the assumption of asymmetric information, the pecking order theory proposes the financing order for farm businesses, which implies a negative relationship between their cash flow and...

There has been considerable normative research about how farmers should make marketing decisions, but little positive research on what farmers really do. Regressions of gender, total volume, timing, and frequency of sales on the average weighted price received are used to test hypotheses...

In this study, we attempt to prove some previously held ideas of machinery investment decisions using farm level data from Illinois. Investment decisions are analyzed taking into consideration past investment decisions in the county and on the individual farm. The results show there is a...

This paper examines the effect of diversification on farm value by comparing values of diversified farms to a portfolio of comparable specialized farms. Using data from the Agricultural Resource Management Study, this study finds a diversification discount in agriculture similar to the discount...