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We examine persistence and cross-market liquidity spillovers in the Chicago Mercantile Exchange soybean complex futures markets. A multidimensional liquidity measure is derived from the limit-order-book, and a Vector Heterogeneous Autoregressive model estimates high-resoluted liquidity from 30 s to one trading day. We find traders' order placement influenced by the liquidity of related markets. Liquidity persistence and positive liquidity spillovers mainly occur within 30 s, whereas spillovers for longer horizons are mostly negative. Findings are important for hedgers that hedge the crush and traders who wish to capitalize on the short-term deviation of price relationships.

Dutch horticultural firms have expanded rapidly in recent decades, both in terms of their production area as well as in number of employees. In particular in the production of fresh fruits and vegetables, a number of very large horticultural firms emerged with often more than 100 employees, operating on tens of hectares of greenhouses. A standard explanation for firm growth is that firms want to benefit from economies of scale, where the increased scale of production would ensure lower average (fixed) production costs. This article however shows that cost reduction due to economies of scale is not the main driver behind the growth in horticultural firm size. In fact, our empirical evaluation shows that larger horticultural firms face higher average production costs compared to smaller firms. However, these higher production costs are compensated by the on average higher and more stable output prices obtained by larger firms. This positive effect of firm size on firm revenues therefore provides a different rationale for the recent growth in average size of Dutch horticultural firms. As a result, our findings demonstrate that revenue-related aspects are becoming more important in understanding firm growth of primary producers in the horticultural sector.

This paper evaluates the long-term impact of microfinance credit from the intensity of participation in borrowing. We use a four-round panel data set on 351 farm households that had access to microfinance in northern Ethiopia. Over the years 1997-2006, with three-year intervals, households are observed on key poverty indicators: improvements in annual consumption and housing improvements. The relatively long duration in the panel enables to measure household poverty changes between consecutive periods and see the long-run effects of exposure to microfinance from the intensity of participation borrowing. The fixed-effects model is innovatively modeled to account for potential selection biases due to both time-invariant and time-varying unobserved individual household heterogeneities. Results show that microfinance borrowing indeed causally increased consumption and housing improvements. A more flexible specification that allows for the number of times the household has been in borrowing also shows that repeated borrowing is effectively increasing consumption: the longer the borrowing relationship the larger the effect partly due to lasting credit effects. Impact estimates that do not account for such dynamic effects may therefore undermine the effect of MFI borrowing.

Theoretical models on group lending assume the formation of groups of homogenous risk types. Recent theoretical and empirical findings challenge this view arguing that when markets for insurance are missing, risk homogeneity may not hold any more and risk heterogeneity can be the optimal outcome. Using data from an MFI in Tigray (Ethiopia), this article examines the homogeneity hypothesis and reflects on implications for repayment. No evidence is found that supports risk homogeneity, even accounting for matching frictions. However, we also do not find an explicit link between the presence of risk heterogeneity and side-payments due to missing insurance as suggested in the literature. Instead, other trust-based social networks seem to underlie heterogeneity. Such social networks are often synchronized with credit groups and influence the probability of repayment under heterogeneity. The implication is that successful repayment rates in group lending need not arise only under risk homogeneity but can also arise under risk heterogeneity. Heterogeneity may also serve to bridge missing insurance markets in poor rural environments. MFIs therefore need to consider such local conditions when designing their lending schemes

This article focuses on adoption and modification decisions on improved maize storage technologies in southern Benin. Modification implies changing a technology to adapt to farmers' circumstances. A sample selection framework is used to account for selectivity bias as some farmers were not aware of the new technologies. Using this framework, the study investigates the effect of alternative information sources on adoption and modification decisions. Farmers are either informed by extension agents or by other farmers. The empirical results show that there are differences in adoption and modification decisions between these two groups.

This article provides an empirical analysis of farm-gate tomato price negotiations under asymmetric information. Regression models are estimated to analyze when and by how much sellers stick to their initial ask prices and what explains the variation in the initial ask–offer price spread. Detailed information on 66 farm-gate tomato transactions and daily tomato wholesale price data from the central vegetable market in Addis Ababa are used for the analysis. Estimation results show that farmers are less committed to their initial ask price when the buyer speaks out the transaction price first, when their quality perceptions of the tomatoes being transacted differ from those of the buyers, and when their tomato farm is at a large distance from the main road. Sellers stick more to their initial ask price when they know that the central market price is high. The initial ask–offer price spread decreases when the buyer speaks out the initial negotiation price first, but increases in the difference in quality perception between buyer and seller, and in the quantity of tomatoes being transacted.

This paper develops a dynamic model of investment under rational expectations, assuming farm-specific production technologies and adjustment cost structures. The model distinguishes regimes of negative, zero and positive investments and maintains that it is optimal for a farmer not to invest for a range of shadow prices, depending on thresholds for positive and negative investments. The model is applied to a rotating sample of Dutch pig farms over the period 1980-1996. Farm-specific parameters of the adjustment cost function and production technology are obtained using Generalised Maximum Entropy estimation. Cluster analysis using the farm-specific adjustment cost parameters indicates that five groups of farms with distinct adjustment cost structures can be identified. A tobit regression analysis is used to explain the impact of different socio-economic factors on the size of the threshold between positive and negative investments.