Book Volume 1
Page: 1-22 (22)
Author: Anthony N. Rezitis, Fotini Mentesidi and Konstantinos S. Stavropoulos
This paper examines the long-run price relationships and regime shifts that govern the price transmission mechanisms between the farm, domestic wholesale, imported, and retail levels of the Greek lamb market. The examination is carried out using the vector error correction model (VECM), structural moving average model (SMAM), and Markov-switching vector error correction model (MS-VECM) on monthly price data for the period 1993-2005. The results indicate the existence of three long-run price relationships between the producer, domestic wholesale, imported, and consumer prices. Furthermore, the results suggest that the retail price is the driving force of the price marketing chain and that a sudden shock in the retail price causes long-run imbalances in all other prices, while an unexpected shock in one of the other prices (i.e. producer, domestic, and imported) causes only short-term imbalances. Finally, the results of the MS-VECM show price instability during the years following the Common Agricultural Policy (CAP) reforms which last until prices readjust to the new policy regime.
Page: 23-35 (13)
Author: Tzouramani Irene and Mattas Konstadinos
This paper applies option-pricing theory to evaluate an investment decision by farmers regarding their potential conversion to organic agriculture. Because the adoption of organic-farming techniques involves risk and uncertainty, there is a need for well-designed policy schemes (including possible incentives and subsidies for farmers). However, conventional accounting methods for analysis of such investment decisions-such as the commonly used net present value (NPV) method-have limitations under uncertain economic conditions. This study demonstrates that the framework of real-options analysis is an appropriate form of analysis to examine the question of investment profitability under risk and uncertainty, and to assess the role of economic subsidies in policies designed to encourage organic farming.
Page: 36-63 (28)
Author: Athanasios Petsakos and Stelios Rozakis
PDF Price: $15
Mathematical programming models have been extensively used for assessing the impacts of agricultural policy especially in case of radical shifts. Although mathematical programming (MP) was first introduced as a farm management tool, regional bottom-up models have been implemented as an instrument of policy analysis. Regional models include classical normative mathematical programming models (with linear or non-linear objective function) and Positive Mathematical Programming (PMP) ones. PMP was first introduced in 1995 to calibrate LP models and relies upon the assumption that the economic agent’s observed behavior is in fact optimal. The aim of this paper is to compare two different PMP methods on their ability to predict crop mix changes due to the decoupling and crosscompliance measures. For this purpose, a sample of 70 farms from Thessaly is used by means of a survey. Both models are validated against base year observations (2005) and predictions of farmers’ reactions for the following year (new CAP implementation in Greece) are compared with the actual observations (2006), revealing the strengths and the weaknesses of the examined methodologies.
A Comparative Financial Assessment Analysis of Agricultural Production Cooperatives in the Krasnodar Region-Russia
Page: 64-76 (13)
Author: Nadezhda Pashkova, George Baourakis and Constantin Zopounidis
PDF Price: $15
This paper provides a perspective of the current dynamics of the agricultural production cooperatives, with respect to the recent changes which have taken place in the agricultural sector. The main purpose of this research is to estimate the viability of production cooperatives under competitive conditions and to evaluate the financial aspects of their activities. Profitability, liquidity and efficiency are examined in this research approach. The Krasnodar region was selected for this comparative study as one of the largest agricultural producing regions in Russia. The comparative analysis was carried out based on the data derived throughout four consecutive years (from 2003 to 2006). For the purpose of this study, ten cooperatives from the Krasnodar region were selected. A factor analysis and the multicriteria method (PROMETHEE ) were used for data analysis. The aim was to determine the financial impact of business specialization and to reveal the optimum managerial policies applied on the agricultural production cooperatives.
Page: 77-94 (18)
Author: Constantine Iliopoulos
PDF Price: $15
This paper addresses the issue of how intra-organizational incentive alignment mechanisms evolve to solve the free rider problem in collective bargaining. We focus on agricultural bargaining cooperatives (ABCs), a particular form of producer-owned firms mainly observed in the West Coast states of the US. These organizations play several crucial institutional roles that include, among others, enhancing farmers’ countervailing power vis-à-vis powerful processors, deterring postcontractual opportunism, enabling price discovery, and ameliorating moral hazard and adverse selection problems. The single most important factor that constrains ABCs’ ability to play such roles is the free rider problem. The latter refers to the situation where a non-member receives benefits associated with the provision of public goods by the cooperative (e.g., higher commodity prices), but avoids becoming a member-and thus eschews contributing to the costs associated with this provision, which are incurred by members alone. We review quantitative and qualitative evidence collected for more than ten years from ABCs to explore the evolution of solution instruments used to align member incentives and thus minimize the inefficiencies arising from the free rider problem. The obtained results suggest that mechanisms evolve from Market to Community to Contract to Hierarchy solutions. In organizations characterized by highly heterogeneous memberships the provision of a combination of intra-organizational incentives is the only means to addressing the free rider problem efficiently.
Page: 95-102 (8)
Author: Athanasios Tsagkanos and Dimitrios P. Koumanako
PDF Price: $15
The present study attempts to add to the literature by contrasting multinationals and domestic enterprises as regards the relative impact of performance measurement systems adoption on accounting profitability, based on data from Greek manufacturing industries. Two research instruments were successively used in this study. Initially, qualitative data were collected using questionnaires. Then empirical analysis was conducted with the application of Bootstrap methodology in the context of logit models. Results reveal that major cultural differences concerning the performance measurement systems orientation do exist among the two groups under consideration since Greek multinationals corporations seem to implement and operate in more developed organizational frameworks. However, empirical analysis of quantitative data does not coincide with the aforementioned deductions showing that Greek multinationals accounting performance suffers in comparison to that of domestic firms.
Page: 103-113 (11)
Author: Andreas C. Drichoutis, Rodolfo M. Nayga Jr and Panagiotis Lazaridis
PDF Price: $15
We examine how ability to perform nutrition related tasks (i.e. tasks that involve extracting information from the label or use the label for dietary management tasks), among nutritional label users, may affect diet quality. We view the inability to perform nutrition tasks as a constraint in improving the dietary quality of individuals. We then consider the simultaneous determination of the ability to perform nutrition tasks and diet quality by using a simultaneous equation model. Our results suggest that ability to perform nutrition related tasks does not affect dietary quality, although this finding is insignificant at the margin. We also find that several demographic factors can affect ability to perform tasks as well as diet quality. Consumer welfare and public policy implications are also discussed.
Spatial Approach to Territorial Convergence Across the EU-15 Regions and the Common Agricultural Policy
Page: 114-140 (27)
Author: Maria Sassi
PDF Price: $15
The European Commission is encouraging reflection on territorial convergence. At the core of its political agenda is the understanding of the features of the centre–periphery equilibrium and uneven development, the common challenges across regions and the territorial impact of the CAP. These issues represent the topic of the paper, referred to as 166 EU-15 regions at the NUTS II level, and to the time period from 1995–2005. As the CAP is still a strictly sectoral policy, it primarily affects agricultural growth and, through this sector, economic convergence. Thus, the empirical analysis, first, characterises the agricultural and economic conditional catching-up process and, subsequently, compares the local sectoral parameters of convergence. The role of spatial nonstationarity is detected comparing OLS and GWR estimates. Empirical findings suggest GWR as a more appropriate model specification and preferable for explanatory spatial data analysis in accordance with a territorial perspective to convergence. Further, there is high heterogeneity in the behaviour of the different agricultural and economic regions referable to convergent clubs across neighbouring regions. The analysis also underlines a general negative correlation between agricultural and economic speed of convergence, although the great diversity between sub-groups of regions calls for a better understanding of the determinants of these relationships and of sectoral productivity growth. In this context, the role of the technological capital accumulation process is underlined, particularly in the light of a CAP that has not been able to support catching up.
Page: 141-159 (19)
Author: George L. Liaskos and Christos T. Papadas
PDF Price: $15
The neoclassical growth model has been supported by a large amount of regional and cross-country studies providing evidence of β-convergence. Nevertheless, it faces theoretical and empirical challenges which are still the subject of research on the dynamics of growth. Consideration of human capital accumulation has strengthened the theoretical foundations of the model, especially its open economy version. It has also improved the explanatory power of the model and its usefulness in quantitative analysis. Human capital accumulation accounts for that part of observed per capita income and output disparities, not explained adequately by the initial approach. Newer versions of neoclassical growth modeling imply clearly that the process of growth and convergence depends heavily on human capital accumulation and convergence. This study investigates regional human capital convergence in Greece during the period 1971-2001, for the census years of which necessary data are available. Following the usual practice in the literature, human capital quality is expressed in terms of educational achievement. Panel data econometric analysis is conducted using census year data for the Greek prefectures (NUTS III areas). The existence of human capital β-convergence is examined. Changes in the distributions of educational achievement, using different criteria, are also examined in order to see if actual convergence occurs. Results show that both space and time effects are significant and so is the established conditional -convergence. Nevertheless, actual convergence is not achieved over the examined period and the dispersion of the observed human capital distributions has been increasing.
Economic Determinants of Inward Foreign Direct Investment to Transition Countries. The Cases of Bulgaria and Romania
Page: 160-167 (8)
Author: Dimitrios Kyrkilis and Pantelis Pantelidis
PDF Price: $15
The aim of this paper is to provide some assessment of the Foreign Direct Investment (FDI) prospects of the two transition countries acceded to the EU on January 1st, 2007, namely Bulgaria and Romania. In particular, it would attempt to assess the main FDI determinants for these countries after accession. Wage differentials between the two newly acceded countries and the EU-15 average in an environment of increasing trade integration with the EU-15 proves to be the primary reason of FDI entry to both countries. The privatization process and domestic demand play also important role. Some implications for the future prospects of FDI inflows to both countries are also drawn.
Page: 168-183 (16)
Author: Irene Fafaliou and Michael L. Polemis
PDF Price: $15
During the last decade the liberalisation of the European Union (EU) natural gas market has been acknowledged as a fundamental priority adopted by officials to promote economic growth and enhance the level of competition in the region. Although significant progress has been made, competition is slow as the natural gas industry remains highly concentrated, with relatively little cross-border trade activity. The aim of this chapter is to assess the liberalization process of the EU natural gas industry and determine the extent to which it has impacted less liberalized countries such as Greece. In order to attain this object, we study the case of the Greek natural gas market by employing Porter’s competitive model of five forces. Our analysis indicates that although the liberalisation of the Greek natural gas market has been set as a priority in the regulators’ agenda, the level of effective competition in the market still lacks behind.
The aim of the eBook series of Research Topics in Agricultural & Applied Economics (RTAAE) is to publish high quality economic researches applied to both the agricultural and non-agricultural sectors of the economy. The subject areas of this eBook series include, among others, supply and demand analysis, technical change and productivity, industrial organization, labor economics, growth and development, environmental economics, marketing, business economics and finance. By covering a broad variety of economic research topics, this eBook series should prove to be of considerable interest to a wide spectrum of academic, agricultural and applied economic researchers and scientists, as well as to industry specialists and government policy makers.