Abstract: The paper investigates the viability of crop farms in Romania, an important topic because in rural regions agriculture is the main activity of a large part of the labour force and plays an important role in food security. In the literature, only trends and changes in viability as a result of policy at the European level are analysed. This study advances the literature by identifying the determinants of viability with a new model (correlated random effects ordered probit model) that intrinsically captures unobserved heterogeneity of farms. The results show that the viability of crop farms dependents incrementally on the volume of resources (scale). The paper shows that there is scope to increase farms’ income if some changes are made in the structure of production factors (land, labor).

Keywords: Viability; Crop Farms; Correlated Random Effects Ordered Probit Model

JEL codes: C21 C51 D22 Q12 Q18

DOI: ...