Economics & Sociology

The aim of this paper is to assess the impact of investment support on labour productivity in Lithuanian family farms. This issue is of particular importance when appraising whether the investment support has had the anticipated effects. Propensity score matching is employed to quantify the average treatment effect on the treated farms. The research is based on panel data from the Farm Accountancy Data Network covering the period of 2007–2012. The results show that Lithuanian farmers’ participation in investment measures did not result in labour productivity gains. These results provide guidance for policy makers with regards to decisions on investment support measures beyond 2020.

1. Bartova, L., & Hurnakova, J. (2016). Estimation of farm investment support effects: a counterfactual approach. Retrieved August 6, 2018, from http://fhi.sk/files/katedry/kove/ssov/VKOXVIII/Zbornik2016.pdf#page=19

2. Buysse, J., Verspecht, A., & van Huylenbroeck, G. (2011). Assessing the impact of the EU Common Agricultural Policy pillar II support using micro-economic data. Retrieved January 24, 2019, from http://ageconsearch.umn.edu/bitstream/99596/2/buysseverspecht

3. Ciaian, P., Kancs, D. A., & Michalek, J. (2015). Investment crowding-out: firm-level evidence from Germany. Retrieved October 11, 2018, from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2634922

4. Doucha, T., Pechrova, M., Chaloupka, O., & Medonos, T. (2017). Investment supports to the Czech farms and their expected future under the CAP 2020+. Retrieved January 14, 2019, from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3102899

5. European Commission. (2018). FADN Public Database. Retrieved October 23, 2018, from http://ec.europa.eu/agriculture/rica/database/database_en.cfm

6. Goolsbee, A. (1998). Investment tax incentives, prices, and the supply of capital goods. The Quarterly Journal of Economics, 113(1), 121–148. doi: https://doi.org/10.1162/003355398555540

7. Guo, S., & Fraser, M. W. (2015). Propensity score analysis: Statistical methods and applications. Thousand Oaks, CA: Sage.

8. Hlavsa, T., Hruška, M., & Turkova, E. (2017). The impact of investment support from the Rural Development Programme of the Czech Republic for 2007–2013 on the economic efficiency of farms. Studies in Agricultural Economics, 119(1), 11–17. doi: https://dx.

9. Huggett, M., & Ospina, S. (2001). Does productivity growth fall after the adoption of new technology? Journal of Monetary Economics, 48(1), 173–195. doi: https://doi.org/10.1016/S0304-3932(01)00065-4

10. Kirchweger, S., & Kantelhardt, J. (2012). Improving farm competitiveness through farm-investment support: a propensity score matching approach. Retrieved December 27, 2018, from https://www.wiso.boku.ac.at/fileadmin/data/H03000/H73000/H73300/pub/2012/2012

11. Kirchweger, S., Kantelhardt, J., & Leisch, F. (2015). Impacts of the government-supported investments on the economic farm performance in Austria. Agricultural Economics (Zemědělská Ekonomika), 61(8), 343–355. doi: https://doi.org/10.17221/250/2014-AGRICE

12. Kollár, B., & Sojková, Z. (2016). Impact of the Investment Subsidies on the Efficiency of Slovak Farms. Retrieved January 28, 2018, from http://www.opf.slu.cz/uds/konference/sbornik16/pdf/kollar_sojkova.pdf

13. Kulawik, J. (2016). Dylematy budżetowego wspierania inwestycji rolniczych. Zagadnienia Ekonomiki Rolnej, 2(347), 52–72. DOI: 10.5604/00441600.1203341

14. Lithuanian Institute of Agrarian Economics. (2018). FADN survey results. Retrieved October 22, 2018, from https://www.laei.lt/index.php?mt=vt_UADT_tyrimas&straipsnis=482

15. Medonos, T., Ratinger, T., Hruska, M., & Spicka, J. (2012). The assessment of the effects of investment support measures of the Rural Development Programmes: the case of the Czech Republic. Agris on-line Papers in Economics and Informatics, 4(4), 35–48.

16. National Paying Agency. (2019). Statistics of the Rural Development Programme for Lithuania 2007–2013, Retrieved February 11, 2018, from https://www.nma.lt/index.php/parama/lietuvos-kaimo-pletros-20072013-m-programa/statistika/8801#res

17. Papageorgiou, A. (2015). Agricultural Equipment in Greece: Farm Machinery Management in the Era of Economic Crisis. Agriculture and Agricultural Science Procedia, 7, 198–202. doi: https://doi.org/10.1016/j.aaspro.2015.12.017

18. Pawłowska, A., & Bocian, M. (2017). Estymacja wpływu polityki rolnej na wydajność pracy z wykorzystaniem propensity score matching. Warszawa: Instytut Ekonomiki Rolnictwa i Gospodarki Żywnościowej-Państwowy Instytut Badawczy.

19. Pawłowska, A., Bocian, M., & Jaroszewska, J. (2018). Evaluation of investment support under Rural Development Programme 2014–2020 – preliminary results for Poland. Retrieved August 22, 2018, from http://ageconsearch.umn.edu/record/271973/files/Pawlowska_B

20. Pechrova, M. (2012). Contribution of Supports to Modernisation for Enhancing Competitiveness of the Czech Agricultural and Forestry Holdings. Retrieved January 28, 2019, from http://ageconsearch.umn.edu/bitstream/135773/2/Pechrova2.pdf

21. Power, L. (1998). The missing link: technology, investment, and productivity. Review of Economics and Statistics, 80(2), 300–313. doi: https://doi.org/10.1162/003465398557393

22. Ratinger, T., Medonos, T., & Hruška, M. (2013). An Assessment of the Differentiated Effects of the Investment Support to Agricultural Modernisation: the Case of the Czech Republic. Agris On-Line Papers in Economics & Informatics, 5(4), 153–164.

23. Ratinger, T., Medonos, T., & Hruška, M. (2015). The empirical assessments of the effects of the investment support to agriculture in the Czech Republic. Retrieved January 29, 2019, from http://ageconsearch.tind.io//bitstream/212242/2/Ratingger.pdf

24. Ratinger, T., Curtiss, J., Medonos, T., & Hruška, M. (2018). The Dynamic Effects of Investment Support of the EU Rural Developent Programme on Czech Farms' Structure and Performance. Retrieved September 3, 2018, from http://ageconsearch.umn.edu/record/276

25. Rosenbaum, P. R. (2005). Heterogeneity and Causality: Unit Heterogeneity and Design Sensitivity in Observational Studies. The American Statistician, 59(2), 147–152. doi: https://doi.org/10.1198/000313005X42831

26. Sakellaris, P. (2004). Patterns of plant adjustment. Journal of Monetary Economics, 51(2), 425–450. DOI: 10.1016/j.jmoneco.2003.03.002

27. Salvioni, C., & Sciulli, D. (2018). Rural development policy in Italy: the impact of growth-oriented measures on farm outcomes. Agricultural Economics (Zemědělská Ekonomika), 64(3), 115–130. DOI: 10.17221/73/2016-AGRICECON

28. Sass, R. (2017). Efficiency of investments in Polish farms before and after accession to the European Union. Journal of Agribusiness and Rural Development, 2(44), 445–453. DOI: 10.17306/J.JARD.2017.00309

29. Strawiński, P. (2014). Propensity score matching. Własności małopróbkowe. Warszawa: Wydawnictwo Uniwersytetu Warszawskiego.

30. Takács, I. (2014). Change of Labour Productivity on Farms in European Union Member Countries (2004–2011). Roczniki Naukowe Stowarzyszenia Ekonomistów Rolnictwa i Agrobiznesu, 16(2), 287–293.

31. Travnikar, T., & Juvančič, L. (2013). Application of spatial econometric approach in the evaluation of rural development policy: the case of measure Modernisation of agricultural holdings. Studies in Agricultural Economics, 115(2), 98–103. DOI: 10.7896/j.

32. Veveris, A. (2014). Investment support and its impact on the economic results of rural farms in different groups. Retrieved January 29, 2019, from http://llufb.llu.lv/conference/economic_science_rural/2014/ESRD_34_2014_Productions-154-162.pdf

33. Wigier, M., Wieliczko, B., & Forgarasi, J. (2014). Impact of Investment Support on Hungarian and Polish Agriculture. Retrieved January 29, 2019, from http://ageconsearch.umn.edu/bitstream/172973/2/WigierM-WieliczkoB-FogarasiJ_Impact%20of%20investment%20su