Agency cost of debt: evidence from Kansas farm operations

  title={Agency cost of debt: evidence from Kansas farm operations},
  author={Brady E. Brewer and Allen M. Featherstone},
  • Brady E. Brewer, Allen M. Featherstone
  • Published 2017
  • Economics
  • Purpose - The purpose of this paper is to examine how debt affects the cost structure of a farm. Agency costs arise when stakeholders of a farm manage their farm differently to obtain debt which results in inefficiencies. These inefficiencies cause a farm to deviate from cost minimization strategies. Design/methodology/approach - This study uses the non-parametric technique of data envelopment analysis. Through this method, a non-stochastic cost frontier is constructed where all farms must lie… CONTINUE READING

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