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The Impact Of Farm Succession Decisions On The Financial Performance Of The Farm

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  • Harris, James Michael
  • Mishra, Ashok K.
  • Williams, Robert P.

Abstract

Farm succession by the “next generation” is a key factor in the determination of industry structure and the total number of farmers and has profound implications for farm families which rely heavily on intergenerational succession. Our results indicate that, in addition to farm, operator, and off-farm work variables, succession plans have a positive and significant effect on financial performance, both in terms of higher profit margins and returns to equity. Further, we also find that farms with designated family successors have higher financial performance, both in terms of higher profits margins and returns to equity.

Suggested Citation

  • Harris, James Michael & Mishra, Ashok K. & Williams, Robert P., 2012. "The Impact Of Farm Succession Decisions On The Financial Performance Of The Farm," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124749, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea12:124749
    DOI: 10.22004/ag.econ.124749
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    1. Ashok Mishra & Hisham El-Osta, 2008. "Effect of agricultural policy on succession decisions of farm households," Review of Economics of the Household, Springer, vol. 6(3), pages 285-307, September.
    2. Pramodita Sharma & James J. Chrisman & Amy L. Pablo & Jess H. Chua, 2001. "Determinants of Initial Satisfaction with the Succession Process in Family Firms: A Conceptual Model," Entrepreneurship Theory and Practice, , vol. 25(3), pages 17-36, April.
    3. Hoppe, Robert A. & Banker, David E., 2006. "Structure and Finances of U.S. Farms: 2005 Family Farm Report," Economic Information Bulletin 33895, United States Department of Agriculture, Economic Research Service.
    4. Hoppe, Robert A. & Banker, David E., 2006. "Structure and Finances of U.S. Farms: 2005 Family Farm Report," Economic Information Bulletin 59404, United States Department of Agriculture, Economic Research Service.
    5. Mishra, Ashok K. & El-Osta, Hisham S. & Shaik, Saleem, 2010. "Succession Decisions in U.S. Family Farm Businesses," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(01), pages 1-20.
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    Cited by:

    1. Muhammad Abid Shahzad & Syed Abubakr & Christian Fischer, 2021. "Factors Affecting Farm Succession and Occupational Choices of Nominated Farm Successors in Gilgit-Baltistan, Pakistan," Agriculture, MDPI, vol. 11(12), pages 1-17, November.
    2. Lippsmeyer, Margaret & Langemeier, Michael & Mintert, James & Thompson, Nathan, . "Factors Impacting Succession Planning," farmdoc daily, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics, vol. 13(163).
    3. Dudek, Michał & Pawłowska, Aleksandra, 2022. "Can succession improve the economic situation of family farms in the short term? Evidence from Poland based on panel data," Land Use Policy, Elsevier, vol. 112(C).
    4. Andrew P. Barnes, 2023. "The role of family life‐cycle events on persistent and transient inefficiencies in less favoured areas," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(1), pages 295-315, February.
    5. Banovic, Marija & Duesberg, Stefanie & Renwick, Alan & Keane, Mark & Bogue, Pat, 2015. "The Field: Land mobility measures as seen through the eyes of Irish farmers," 89th Annual Conference, April 13-15, 2015, Warwick University, Coventry, UK 204200, Agricultural Economics Society.
    6. Danuta Zawadzka & Agnieszka Strzelecka & Ewa Szafraniec-Siluta, 2021. "Debt as a Source of Financial Energy of the Farm—What Causes the Use of External Capital in Financing Agricultural Activity? A Model Approach," Energies, MDPI, vol. 14(14), pages 1-17, July.
    7. Protopop, Iuliia & Boehlje, Michael & Stockton, Matthew & Bradley, Lubben, 2016. "The Effect of the Timing of Farm Transfer Initiation on Terminal Wealth in the Business: Simulation Model," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236006, Agricultural and Applied Economics Association.
    8. Zou, Baoling & Mishra, Ashok K. & Luo, Biliang, 2018. "Aging population, farm succession, and farmland usage: Evidence from rural China," Land Use Policy, Elsevier, vol. 77(C), pages 437-445.
    9. Agnieszka Strzelecka & Danuta Zawadzka, 2023. "Savings as a Source of Financial Energy on the Farm—What Determines the Accumulation of Savings by Agricultural Households? Model Approach," Energies, MDPI, vol. 16(2), pages 1-18, January.
    10. Gessner, Heather & Chowdhury, Niaz Murshed & Clary, Reid & Akinyemi, Abidemi & Moges, Michael & Quaye, Archibold, 2014. "The next generation of South Dakota producers, are the operations prepared for the transition of assets and management?," MPRA Paper 90823, University Library of Munich, Germany.

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    Keywords

    Farm Management;

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