Determinants of insurance adoption among Bulgarian farmers

2014 ◽  
Vol 74 (3) ◽  
pp. 326-347 ◽  
Author(s):  
Marianne Lefebvre ◽  
Dimitre Nikolov ◽  
Sergio Gomez-y-Paloma ◽  
Minka Chopeva
Keyword(s):  
Risk Management ◽  
Structural Characteristics ◽  
Probit Model ◽  
Farm Size ◽  
Agricultural Insurance ◽  
Management Tools ◽  
Regional Effect ◽  
Content Type ◽  
Insurance Sector ◽  
Recent Developments

Purpose – The purpose of this paper is to analyze the determinants of agricultural insurance adoption in Bulgaria, using a purpose-built survey of 224 farmers interviewed in 2011. The insurance decision is analyzed conjointly with other risk management decisions on the farm such as having contracts with retailers or processors, diversifying farm activities and using irrigation. Design/methodology/approach – The agricultural insurance sector in Bulgaria is presented in the broader context of the transition to a market-oriented economy and integration of Bulgarian agriculture into the EU Common Agricultural Policy. The recent developments on the determinants of farm insurance adoption in the agricultural economics and finance literature are discussed. A multivariate probit model is used in order to determine the factors explaining the adoption or non-adoption of various risk management tools by the surveyed farmers, including farm insurance. Findings – The authors find that farmers with diversified activities, using irrigation or having contracts with retailers or processors, are more likely to adopt insurance, after controlling for farms and farmers’ structural characteristics. Additionally, the authors find that the main characteristics distinguishing farmers who purchase agricultural insurance from non-users are farm size and farm location. The existence of strong regional effect suggests the importance of adapting the insurance products to the different regional contexts in Bulgaria. Originality/value – This paper contributes to the (limited) literature on agricultural insurance adoption in transition countries, currently shifting from a system where compensation against natural hazards tended to come from a State damage mitigation fund, inherited from the centrally planned governments to private and voluntary agricultural insurance. This research provides a unique data source on the Bulgarian case study.

Factors influencing Midwestern grain farmers’ use of risk management tools

2019 ◽  
Vol 79 (2) ◽  
pp. 192-203
Author(s):  
Brian K. Coffey ◽  
Ted C. Schroeder
Keyword(s):  
Risk Management ◽  
Management Practices ◽  
Mail Survey ◽  
Management Tool ◽  
Farm Size ◽  
Management Tools ◽  
Content Type ◽  
Multinomial Logit Regression ◽  
Decision Choices ◽  
Grain Farmers

PurposeThe purpose of this paper is to identify the relationships between grain farm and farmer profiles and their respective choices to use forward pricing techniques and revenue protection crop insurance to manage risk.Design/methodology/approachAn e-mail survey of Midwestern grain farmers elicited farmer demographic information, farm profile, risk attitudes and farmer use of forward pricing and revenue protection insurance. Responses regarding use of risk management tools were compiled as choices to use possible bundles of tools to account for simultaneous nature of the decision. Choices to use bundles of tools were used as the independent variable categories in a multinomial logit regression. Regressors were relevant data collected from the survey.FindingsFarm size, using a market advisory service, and being a technology adopter are the most important factors in predicting risk management tool use by grain farmers. Farmers tend to use forward pricing and revenue protection insurance in combination. Large farms are more likely to use forward pricing tools.Practical implicationsResults provide researchers, extension professionals and risk management specialists with a current understanding of how farm and farmer characteristics relate to use of risk management tools. The authors also elaborate on findings to provide guidance for future risk management research.Originality/valueThe survey covered 9 Midwestern states and 648 grain farmers. The survey results update understanding of grain farmers’ risk management practices. The empirical approach treats risk management decisions to use available tools as simultaneous, which recent literature suggests is more appropriate than earlier approaches.

scholarly journals Determinants of agricultural insurance adoption: evidence from farmers in the state of São Paulo, Brazil

2020 ◽  
Vol 55 (4) ◽  
pp. 547-566
Author(s):  
Marcelo José Carrer ◽  
Rodrigo Lanna Franco da Silveira ◽  
Marcela de Mello Brandão Vinholis ◽  
Hildo Meirelles De Souza Filho
Keyword(s):  
Risk Management ◽  
Empirical Analysis ◽  
Technical Assistance ◽  
Sao Paulo ◽  
The State ◽  
Management Tool ◽  
Farm Size ◽  
São Paulo ◽  
Agricultural Insurance ◽  
Content Type

Purpose The purpose of this study is to investigate the determinants of agricultural insurance adoption by farmers of the state of São Paulo, Brazil. Design/methodology/approach Primary data from the 2015/2016 crop season was collected from a sample of 175 farmers. Logit econometric models were applied to identify the variables that affect the probability of agricultural insurance adoption. Findings The empirical results show that the education level, access to technical assistance, use of management tools and farm size positively affect the probability of adopting agricultural insurance. In addition, farmers who produce soybean and/or corn are more likely to use insurance. On the other hand, the higher the farmers’ propensity to take risk the lower the likelihood of using insurance. Research limitations/implications The empirical analysis is based on cross-sectional data of a sample of 175 farmers of the state of São Paulo. The use of panel data with a larger sample of farmers, considering a period of years, could provide additional information. Originality/value To the best of the knowledge, this is the first empirical analysis about determinants of agricultural insurance adoption by Brazilian farmers, considering behavioral factors. The findings provide useful insights for policymakers in formulating risk management programs in the Brazilian agricultural markets. A better understanding about the determinants of insurance adoption is also relevant for private companies that sell insurance to farmers. Therefore, the paper may contribute with the diffusion of rural insurance as risk management tool in Brazilian agriculture.

An exploratory study on how SMEs are open to external sources of information

2019 ◽  
Vol 22 (5) ◽  
pp. 765-789 ◽  
Author(s):  
Moulay Othman Idrissi Fakhreddine ◽  
Yan Castonguay
Keyword(s):  
Design Methodology ◽  
Probit Model ◽  
Significant Heterogeneity ◽  
Sources Of Information ◽  
Policy Makers ◽  
Content Type ◽  
Recent Developments ◽  
External Sources ◽  
Canada Data ◽  
Practical Implications

Purpose The purpose of this paper is to draw on recent developments in the open innovation literature to explore whether the openness of SMEs to the four categories of external sources of information (ESI) is complementary, substitute or independent, while assessing the determinants of SMEs’ openness to these ESI. Design/methodology/approach This research is based on data from a survey of 451 manufacturing SMEs in the province of Québec, Canada. Data have been elaborated through a multivariate probit model to empirically show that SMEs are considered to be simultaneously open to different ESI. The results of this study show significant heterogeneity in the determinants of SMEs’ openness to these ESI. Findings The study found that the SMEs’ openness to different ESI seems to be complementary rather than substitute; and not all variables included in the model explain the SMEs’ openness to the different ESI. Practical implications The paper provides practical implications for managers and policy makers including the SMEs’ managers’ role to recognize the consolidation of different ESI jointly instead of separately. Furthermore, managers and policy makers should attempt to provide a fair context to SMEs to manage their openness ecosystem. Originality/value This study is virtually the first to investigate both the complementarity and the determinants of SMEs’ openness to different ESI using a sophisticated econometric model.

An analysis of risk management tools utilized by Illinois farmers

2014 ◽  
Vol 74 (1) ◽  
pp. 69-86 ◽  
Author(s):  
Kerry Tudor ◽  
Aslihan Spaulding ◽  
Kayla D. Roy ◽  
Randy Winter
Keyword(s):  
Cluster Analysis ◽  
Risk Management ◽  
Logistic Regression ◽  
Multinomial Logistic Regression ◽  
Risk Attitude ◽  
Management Tool ◽  
Management Service ◽  
Perceived Effectiveness ◽  
Management Tools ◽  
Content Type

Purpose – The purpose of this paper is to investigate the relationships among choice of risk management tools, perceived effectiveness of risk management tools, self-reported risk attitude, and farm and farmer characteristics. Design/methodology/approach – A mail survey was used to collect information about utilization of risk management tools, perceived effectiveness of risk management tools, and factors that could influence choice of risk management tools by Illinois farmers. Cluster analysis, one-way ANOVA, χ2 tests of independence, and multinomial logistic regression were utilized to detect possible relationships among choice of risk management tools, perceived effectiveness of risk management tools, self-reported risk attitude, and farm and farmer characteristics. Findings – Multinomial logistic regression analysis revealed that age and gross farm income (GFI) were the strongest predictors of the risk management tool utilization group to which an individual would be assigned. The number of risk management tools utilized decreased with age but increased with GFI. Neither self-reported risk attitude nor education was a significant independent variable in the multinomial logistic regression model, but both were strongly impacted by age. Younger farmers with higher GFI were the most likely users of hedging. Research limitations/implications – The results of this study provide support for the idea that farmers who are better able to generate revenue are better able to manage risk, but the direction of causality was not investigated. Practical implications – Risk management service providers could benefit from this study as a benchmark for understanding their current and potential farmer clients’ risk management strategies. Originality/value – This study used cluster analysis and multinomial logistic regression to address the complexity of decisions regarding multiple risk management tools. The number of tools utilized by individuals was investigated.

The uncertainties of risk management

2014 ◽  
Vol 27 (3) ◽  
pp. 489-526 ◽  
Author(s):  
Eija Vinnari ◽  
Peter Skærbæk
Keyword(s):  
Risk Management ◽  
Network Theory ◽  
Internal Audit ◽  
Actor Network Theory ◽  
Legal Aspects ◽  
Structured Interviews ◽  
Management Tools ◽  
Content Type ◽  
Internal Auditors ◽  
Multiple Frames

Purpose – The purpose of this paper is to analyse the implementation of risk management as a tool for internal audit activities, focusing on unexpected effects or uncertainties generated during its application. Design/methodology/approach – Public and confidential documents as well as semi-structured interviews are analysed through the lens of actor-network theory to identify the effects of risk management devices in a Finnish municipality. Findings – The authors found that risk management, rather than reducing uncertainty, itself created unexpected uncertainties that would otherwise not have emerged. These include uncertainties relating to legal aspects of risk management solutions, in particular the issue concerning which types of document are considered legally valid; uncertainties relating to the definition and operationalisation of risk management; and uncertainties relating to the resources available for expanding risk management. More generally, such uncertainties relate to the professional identities and responsibilities of operational managers as defined by the framing devices. Originality/value – The paper offers three contributions to the extant literature: first, it shows how risk management itself produces uncertainties. Secondly, it shows how internal auditors can assume a central role in the risk management system. Thirdly, it develops Callon's framing/overflowing framework with the notion that multiple frames are linked and create unexpected dynamics, and applies it to the study on the effects of risk management tools in an internal audit context. It shows how, despite recurring attempts to refine risk management, further uncertainties are continuously produced, thus providing an empirical illustration of how reframing and overflowing intertwine in a continual process.

scholarly journals Derivative products and innovation in Islamic finance

2014 ◽  
Vol 7 (3) ◽  
pp. 242-257 ◽  
Author(s):  
Seng Kiong Kok ◽  
Gianluigi Giorgioni ◽  
Jason Laws
Keyword(s):  
Risk Management ◽  
Risk Sharing ◽  
Supervisory Board ◽  
Management Tool ◽  
Islamic Finance ◽  
Management Tools ◽  
Content Type ◽  
Risk Transfer ◽  
Financial Framework ◽  
The Creation

Purpose – The purpose of this paper is to highlight the possibility of structuring an Islamic option which includes an element of risk sharing as opposed to risk transfer. Design/methodology/approach – The approach adopted in this research involved a combination of a wa’ad (promise) and murabaha (cost plus sale) and examining if they could form a risk-sharing Islamic option. The payoffs were assumed to be dependent on bi-period outcomes. Findings – The paper attempted to create a hybrid risk-sharing option by combining elements of both wa’ad (promise) and murabaha (cost plus sale). The results yielded are dependent on the eventual direction of the market (in-the-money, at-the-money and out-the-money). While the results are not definitive, they do provide arguments for the adoption of a risk-sharing, as opposed to a risk-transfer, methodology when it comes to structuring risk management instruments. Research limitations/implications – One of the major limitations of this research is the inability to assess the Shariah compliance of the proposed instrument. Shariah compliance is determined by a Shariah Supervisory Board, and every effort has been made to ensure that Shariah financial principles are adhered to in the creation of this structure. Practical implications – The structure provides some interest arguments in the creation of risk management tools under a Shariah financial framework. The structure illustrates the benefits of having a risk-sharing mode over the conventional risk-transfer stances of most risk management tools. Originality/value – The paper offers a new way of structuring a risk management tool in Islamic finance. It explores the highly debated area of derivatives in Islamic finance and proposes a new way of creating a risk management tool that involves some elements of risk sharing.

Agricultural credit and technical efficiency in Ghana: is there a nexus?

2016 ◽  
Vol 76 (2) ◽  
pp. 309-324 ◽  
Author(s):  
Abdul-Hanan Abdallah
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier ◽  
Allocative Efficiency ◽  
Probit Model ◽  
Estimation Procedure ◽  
Farm Size ◽  
Agricultural Credit ◽  
Content Type ◽  
The Impact ◽  
Unique Dataset

Purpose – The purpose of this paper is to examine the impact of agricultural credit on technical efficiency of Ghanaian maize farmers using a unique dataset drawn from the database of Sub-Saharan Africa’s intensification of food crops agriculture (Afrint II) in 2008 period. Design/methodology/approach – In this study, a two-stage estimation procedure is employed to determine impact of agricultural credit on technical efficiency of Ghanaian maize farmers. The first stage utilized probit model while the second stage utilized stochastic frontier approach to estimate impact of credit on technical efficiency of Ghanaian maize farmers. Findings – The study found that farmers are producing below the frontier with average technical efficiency of 47 percent. Policy variables such as credit access; education, extension access and farm size played a stronger role in technical efficiency. Agricultural credit in particular increased technical efficiency by 3.8 percent. Research limitations/implications – The results should not be extended to the impact of agricultural credit on economic efficiency since the allocative efficiency component is not considered in this study. Also, caution should be taken in the interpretation of these results because the data could not permit the incorporation of all variables that might affect technical efficiency. Originality/value – The originality of the paper and its contribution to existing literature largely lies from the use of a unique dataset to find evidence of the impact of credit on efficiency in Ghana.

Risk management tools practiced in Islamic banks: evidence in MENA region

2014 ◽  
Vol 5 (1) ◽  
pp. 77-97 ◽  
Author(s):  
Rim Ben Selma Mokni ◽  
Abdelghani Echchabi ◽  
Dhekra Azouzi ◽  
Houssem Rachdi
Keyword(s):  
Risk Management ◽  
Design Methodology ◽  
Liquidity Risk ◽  
Public Disclosure ◽  
Islamic Banks ◽  
Mena Region ◽  
Management Tools ◽  
Content Type ◽  
Self Administered Questionnaire ◽  
Practical Implications

Purpose – The main purpose of this study is to investigate in detail the way each risk is being measured and managed by Islamic banks in the MENA region. Design/methodology/approach – This research attempts to examine the perceptions of Islamic bankers about the importance of transparency and public disclosure in the understanding of the bank's risk profile. It covers 23 Islamic banks located in the MENA region using self-administered questionnaire. Findings – The results show that there are differences in the level of risk perception across funding modes. Also Islamic banks use extensively the traditional tools in mitigating risk. Practical implications – The paper discusses and analyses the current practices employed in the risk management of Islamic banks. It identifies the tools and methods used in managing credit risk, market risk, liquidity risk and operational risk by Islamic banks. Originality/value – This study aims to extend the existing literature in two ways. First, this paper contributes to the dearth of studies on examination of tools practiced in the risk management by Islamic banks located in the MENA region. Next, this work integrates the methods used in the management of liquidity risk that have not been studied earlier.

Assessment of disaster risk management in Mexico

2015 ◽  
Vol 24 (2) ◽  
pp. 230-248 ◽  
Author(s):  
Sergio O. Saldana-Zorrilla
Keyword(s):  
Risk Management ◽  
Risk Reduction ◽  
Disaster Risk ◽  
Disaster Risk Management ◽  
Agricultural Insurance ◽  
Content Type ◽  
Policy Suggestions ◽  
Risk Reduction Measures ◽  
Integral Assessment ◽  
National Governments

Purpose – The purpose of this paper is to provide a set of policy suggestions for integrating risk management and increasing risk reduction measures and planning. Design/methodology/approach – It bases on a brief description of the disaster risk management programs in Mexico, a review of their recent available assessments as well as it makes a brief economic analysis of their performance to conclude with some policy suggestions. Findings – Despite its novel design, the still low penetration of governmental instruments for disaster risk reduction in Mexico has led to high society’s reliance on post-disaster measures. It has encouraged moral risk among potential victims. Even when crop insurance has increased coverage over the past decade, disaster prevention instruments are still underused. Accessing to prevention funding requires project proposals from national and sub-national governments based on concrete risk assessments. However, the prevailing lack of institutional capacity to elaborate proposals from sub-national governments seems to explain it at a large extent. The paper provides a set of suggestions on this regard. Originality/value – There is no recent integral assessment of disaster risk in Mexico. Although there is a recent OECD review of the National Civil Protection System, its analysis leaves out the catastrophic agricultural insurance, critical part of comprehensive risk management of a country. On the other hand, there are recent evaluations of programs public for disaster risk management, but these consist of only individual program evaluations, lacking integrative and comparative analysis. Thus, this paper provides a comprehensive view of government risk management and concludes with a series of policy recommendations.

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