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Solvency, Entrepreneurial Action And The Economic Environment: Lessons From The Recent Past

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  • van Schalkwyk, H. D.
  • Groenewald, J. A.

Abstract

Average solvency in South African agriculture deteriorated considerably between 1976 and 1985, improved somewhat from 1985 to 1988 and thereafter deteriorated once again. Considerable interregional differences exist in relative levels of solvency. Entrepreneurial and managerial influences on this are manifested through financial management involving particularly mechanization, choice of financiers and risk acceptance or avoidance. A cross sectional and discriminant analysis was done to explain solvency differences between regions. Solvency was shown to be a function of land ownership, education, percentage established pastures, enterprise mix, financier, type of management and long term average rainfall. The output/input price ratio, enterprise mix and percentage of debt load financed by co-operatives explained the difference between regions with below and above average solvency ratios.

Suggested Citation

  • van Schalkwyk, H. D. & Groenewald, J. A., 1993. "Solvency, Entrepreneurial Action And The Economic Environment: Lessons From The Recent Past," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 32(4), December.
    • Handle: RePEc:ags:agreko:267695
    DOI: 10.22004/ag.econ.267695
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    References listed on IDEAS

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    1. van Zyl, J. & van der Vyver, A. & Groenewald, J. A., 1987. "The Influence Of Drought And General Economic Effects On Agriculture: A Macro-Analysis," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 26(1), February.
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