Benefit of the doubt model for financial risk analysis of Lithuanian family farms

Dalia Streimikiene, Tomas Baležentis, Irena Kriščiukaitienė

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

The aim of this research is to propose a methodology for integrated assessment of financial risks of family farms in Lithuania. The methodology is based on the benefit of the doubt model. The research relies on the farm-level data from Farm Accountancy Data Network and covers the period of 2004-2011. Multiple financial indicators are included in the model to encompass such features as returns, capital structure, cost of capital, and cash flows. The research focuses on the four main types of farming prevailing in Lithuania, viz. cereal farming, general field cropping, dairying, and mixed field crops – grazing livestock farming. The results show that the financial risk generally increased in Lithuanian family farms during 2004-2011. However, a rebound has been observed in the period since 2009. This might be related to investment decisions and subsequent modernisation. Cereal farms face the highest financial risk, whereas dairy farms are the least exposed to them.

Original languageEnglish
Pages (from-to)60-68
Number of pages9
JournalEconomics and Sociology
Volume9
Issue number1
DOIs
Publication statusPublished - 2016
Externally publishedYes

Fingerprint

farm
Lithuania
cost structure
data network
methodology
research focus
Farm
Financial risk
Family farms
Risk analysis
Farming
modernization
Cereals
Methodology
Dairy farms
Investment decision
Accountancy
Crops
Cost of capital
Modernization

Keywords

  • Benefit of the doubt model
  • Family farms
  • Financial risk
  • Lithuania

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)
  • Sociology and Political Science

Cite this

Benefit of the doubt model for financial risk analysis of Lithuanian family farms. / Streimikiene, Dalia; Baležentis, Tomas; Kriščiukaitienė, Irena.

In: Economics and Sociology, Vol. 9, No. 1, 2016, p. 60-68.

Research output: Contribution to journalArticle

Streimikiene, Dalia ; Baležentis, Tomas ; Kriščiukaitienė, Irena. / Benefit of the doubt model for financial risk analysis of Lithuanian family farms. In: Economics and Sociology. 2016 ; Vol. 9, No. 1. pp. 60-68.
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