Investment In The Greek Processing Of Agricultural Products And Food: A Panel Data Approach

Abstract

                The aim of this research is to quantify Greek investors’ behaviour in the industry of processing agricultural products and food at the aggregate level for all sectors and all regions over the period 1981-1999. The focus of this study is to investigate empirically the effectiveness of the EU and national policies concerning investment incentives in the processing of Greek agricultural products. Investors’ behaviour is examined by employing a synthesized traditional model. The dynamic model is estimated using alternative dynamic panel data methods, GMM and ML techniques. EU and national subsidies are instrumental in stimulating agricultural investments in the past decades, followed by investors’ expectations and, in most of the cases, investment lagged by one year. The empirical results obtained by ML by GMM are very similar, with the exception that the t-statistics are higher in the former case. Moreover, there is no evidence for autocorrelation or dynamic misspecification.