Profit and viability persistence: Evidence from the Spanish agricultural sector

The literature focused on analyzing profit persistence in the agricultural sector is scarce. This paper contributes to reducing this gap by carrying out an empirical study of 10 types farming Spain based a dynamic panel model with microeconomic data from large sample farms provided Spanish Farm Accountancy Data Network. generalized method moments system estimator used assess persistence, including all significant lagged rates explaining adjustment abnormal profits over time. Moreover, farms' economic performance analyzed considering return assets as dependent variable (i.e., measuring profitability), well alternative indicator that also accounts for opportunity costs viability). results show and viability are complex processes depend several lags aforementioned variables (between 2 5 years), high being widespread. In any case, heterogeneous achieved depending type farming. differences found can be explained disparities explanatory contributing above- or below-average performance. conclusions reached could lead sounder decision-making regarding policy farm subsidies) competition exceptions law). [EconLit Citations: D41; L13; L22; L25; Q12; C23].