Credit allocation and farm structures in the Czech Republic, 1993 - 1997

In an analysis of primary survey data collected by the author, de novo family farms in the Czech Republic are shown to have had more limited receipt of credit during 1993-1997 than successor organisations to communist-era farms, which are corporate farms. Criteria for credit allocation are investigated for both farm types. It appears that there is a link between farm profitability and obtaining credit for corporate farms, but not for family farms. An explanation for this finding is suggested, taking into account the inadequacy of conventional credit rating instruments in the transition setting and the informational advantage of corporate farms vis-à-vis family farms. Survey findings are in line with some of the implications of this account. (Comparative Economic Studies / SWP)