FARM FINANCIAL STRUCTURE DECISIONS UNDER DIFFERENT INTERTEMPORAL RISK BEHAVIORAL CONSTRUCTS

An alternative unconstrained expected-utility maximization model of farm debt is developed using the location-scale parameter condition that incorporates the empirically validated hypotheses of decreasing absolute and constant relative risk aversion. Simulation-optimization results based on the old and new model versions provide interesting implications for various levels of risk aversion and initial equity investments.Risk and Uncertainty,

OPPORTUNITY COSTS, SHARE LEASING, AND PREVENTED PLANTING CLAIMS IN CROP INSURANCE

This paper determines whether the opportunity costs of share leasing and the share amounts of farmers/tenants affect the likelihood of submitting a prevented planting claim. Results from our probit analysis shows that lower opportunity costs of share leasing and higher farmer/tenant share amount can increase the probability of submitting a prevented planting. These results have potential implications for setting prevented planting buy-up rates and crop insurance compliance procedures.Risk and Uncertainty,

Labor Rights and Foreign Direct Investment in Latin America: The Empirical Analysis of Proximity Hypothesis

What impact do labor rights practices have on foreign direct investment (FDI) in Latin America? While existing research shows how participation in the global production network influences host country’s labor standards, few studies delve into reversed causal mechanisms whereby changes in labor standards affects FDI inflows. While conventional wisdom says protection of labor rights has negative influence on FDI, I argue that for Latin American countries, practical protection of labor rights attracts FDI. Practical protection of labor right acts as a proxy and signals that host government could protect foreign assets that are under the risk of expropriation. I expect practical increase in labor rights positively affects FDI over time. Utilizing data of 30 Latin American countries and 128 non-Latin American developing countries from 1994 to 2012, and an error correction model shows that de facto labor rights protection has a long-term effect on foreign direct investment in Latin America