Staff Publications

Staff Publications

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    'Staff publications' is the digital repository of Wageningen University & Research

    'Staff publications' contains references to publications authored by Wageningen University staff from 1976 onward.

    Publications authored by the staff of the Research Institutes are available from 1995 onwards.

    Full text documents are added when available. The database is updated daily and currently holds about 240,000 items, of which 72,000 in open access.

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Record number 389307
Title The decision to invest and the investment level: An application to Dutch glasshouse horticulture firms
Author(s) Oskam, A.J.; Goncharova, N.; Verstegen, J.A.A.M.
Event The New Landscape of Global Agriculture,Beijing, China, 2009-08-16/2009-08-22
Department(s) Agricultural Economics and Rural Policy
LEI Agricultural sector & entrepreneurship
Publication type Contribution in proceedings
Publication year 2009
Abstract Investment models typically explain only a small share of the total investment variation within or between firms. A reason for this may be that those models do not explicitly differentiate between the decision to invest and the decision about the level of investment. In this paper, a two-steps theoretical framework and estimation procedure are developed to take into account the different nature of both decisions. ‘Nearly zero’ investments are considered to be small replacement or maintenance investments and treated as ‘zero’ investments. The applied two-step Heckman model shows that the decision to invest is significantly related to available capital (-), wealth (+), debts (-), output prices (+), land price growth (+), capital price growth (-), energy price growth (+), revenues (+) and age of the firm owner (-). The level of investment is also related to available capital, wealth, debts, output price, capital price growth and age of the firm owner, but with opposite signs for debts and capital price growth. Moreover, firm size positively affects the level of investment (but not the decision to invest). The fact that both decisions are affected differently proves the rationale of using a two-step investment model but further research is needed to increase the explanatory power of the models.
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