Innovative Capabilities and Market Performance: The European Union in International Comparison. Jean Monnet/Robert Schuman Paper Series Vol. 12, No. 7, September 2012

This paper investigates the EU’s international positioning in terms of innovative capabilities and global market performance by using most recent quantitative data on a wide branch of indicators. The EU’s performance is compared to the standings of its most important economic competitors and emerging economic powerhouses: the USA, Japan, China, Brazil, India, Russia and South Africa. By doing so, this paper offer insightful and deep information about the EU’s power to compete and rank in international economic affairs. It will be proofed that the European Union ranks in many of the indicators related to innovative capabilities in good position and the EU’s overall global market performance is excellent, whereas the BRICS are underachieving.

Agricultural Credit Market Institutions: A Comparison of Selected European Countries. Factor Markets Working Paper No. 33, January 2013

This paper describes and compares the institutional framework of the agricultural credit markets in selected European countries. The institutions can be both formal (rules, regulations, authorities and actors) and informal (norms, values and relations). They also interact and in situations where the formal institutions are weak, the informal ones increase in importance. The study is based on a questionnaire sent to agricultural financial experts in selected countries. The case studies show that credit regulations are typically general, with no specific regulations for the agricultural credit market. On the other hand, several countries support agricultural credit in various forms, implying that the governments do not perceive the general credit market to function in the case of agricultural firms. In a risk assessment, the most frequent reasons for rejecting a loan application are all linked to economic performance and the situation of the farmer. Personal characteristics, such as educational level or lack of experience, were generally perceived as less influential. Another interesting point when it comes to risk assessment is that in some countries the importance of asset-based lending compared with cash flow-based lending seems to differ when concerning a first-time applicant and when there is an application to extend a loan. To get an idea of the availability of credit, the loan-to-value (LTV) ratio was calculated, and it showed remarkably low values for Poland and Slovakia. For all the countries, the calculated value was lower than what the financial experts would have expected. This might imply credit rationing in agriculture in some of the countries studied. The financial experts all judged the possibility of an agricultural firm obtaining a loan as higher than that for other small rural firms, implying that the latter are also credit-rationed.

Performance Indicators in Agricultural Financial Markets. Factor Markets Working Document No. 43, May 2013

This study attempts to develop performance indicators for the financial markets based on the findings in an earlier Factor Markets Working Paper (No. 33, “Agricultural credit market institutions: A comparison of selected European countries”) and on FADN (Farm Accountancy Data Network) data. Two indicators were developed. One measured the long-term economic sustainability of agricultural firms since the financial characteristics of the firms were perceived as important factors when rejecting a loan applicant. If the indicator works, it should show that a low value in this indicator is related to the performance in the financial markets. The second indicator was the loan-to-value (LTV), or debt-to-asset ratio, the reasoning behind this indicator is that low values can point to credit constraints, and in WP 33 we saw that the interviewed experts expected LTVs to be much higher than what is actually the case. We find that the first indicator can’t be used to measure the performance of the financial institutions, since we can’t show any relationship between the indicator and activities in the financial markets. However, the indicator is valuable for its measurement of the long-term financial sustainability of the agricultural sector, or of the firms. The loan-to-value indicator does imply that most countries would have room to increase the credit.