Business group affiliation and financial performance in the agricultural sector of transition economies: The case of Russian agroholdings

The Russian agri-food sector illustrated remarkable progress over the last decade. Still, the Russian government is striving to boost production even further and has set a number of goals for the industry for the coming years. Agroholdings are believed to be the main engine not only behind the succe...

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Bibliographic Details
Published inJournal for East European management studies Vol. 27; no. 2; pp. 280 - 310
Main Authors Tleubayev, Alisher, Bobojonov, Ihtiyor, Gagalyuk, Taras, Glauben, Thomas
Format Journal Article
LanguageEnglish
Published Baden-Baden Nomos Verlagsgesellschaft mbH und Co KG 01.01.2022
Subjects
Affiliates
Agribusiness
Agricultural production
Agriculture
Capital
Compensation
Efficiency
Executive compensation
Exports
Financial performance
Food
Food processing industry
Food production
Food products
Infancy
Meat industry
Membership
Panel data
Policy making
Poultry
Productivity
Random effects
Sales
Transition economies
Russia
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Summary:The Russian agri-food sector illustrated remarkable progress over the last decade. Still, the Russian government is striving to boost production even further and has set a number of goals for the industry for the coming years. Agroholdings are believed to be the main engine not only behind the success of the industry in recent years, but they are also expected to play a key role in moving the sector towards the set targets. In spite of their increasing role, the literature on agroholdings is still in its infancy and it fails to provide a clear answer on whether they represent a more efficient form of agri-food production. To fill this gap in the literature, we utilise a manually collected panel data set of 203 corporate Russian agri-food enterprises for the years between 2012 and 2017 and provide new empirical evidence on the effects of agroholding affiliation on firms’ financial performance, measured in terms of returns on assets and sales. The results of the random effects model indicate a significant positive impact of agroholding affiliation on financial performance. Further analysis reveals that this positive effect might be attributed to agroholding affiliates’ better access to capital, efficient management and stimulating executive compensation systems. The paper provides empirical recommendations for policy makers and corporate executives involved in the Russian agri-food industry.
ISSN:0949-6181
1862-0019
DOI:10.5771/0949-6181-2022-2-280