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Impact of capital investments on value added in dairy sector
2009
Krievina, A., Latvia Univ. of Agriculture, Jelgava (Latvia);Latvian State Inst. of Agrarian Economics, Riga (Latvia)
The paper deals with the evaluation of the impact of capital investments on the value added in Latvian dairy specialization farms on the basis of FADN data. The evaluation is carried out through analysing the current level of capital investments in Latvia and the link between capital and the net value added and its main components, based on the comparison with the EU leading milk producing countries. The analysis shows that the current level of capital investments is low in Latvia, especially in buildings and fixed equipment. Insufficient capital investments result in high intermediate costs, lower labour productivity due to large labour contribution in the total output, and also in considerably lower level of the value added, especially per AWU in Latvia.
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