The impact of structural social capital on farm income in the Czech Republic

Abstract

The change of the economic system from the socialist central planning system to the market economy required the reorganisation not only of agricultural production, but also of the organisations supporting it. In the Czech Republic, agricultural production is characterised by a dualistic structure, i.e. private farmers on the one side and corporate farms on the other. However, among both groups some had been economically more successful than others. In general, a varying adoption of production factors, i.e. land, labour and capital is identified as being of influence. Namely, their ability to collaborate with other farms which is discussed under the concept of social capital, will be analysed in this paper. Based on the findings of a survey among a sample of 62 farms by adopting factor and multiple regression analysis, it can be deduced that social capital is indeed a significant factor determining farm income.