Business groups and competition in post-Soviet transition economies: The case of Russian “agroholdings”

Abstract

Business groups, Competition, Transition economies, Russia, B 53, D 43, P 31, P 32,

What drives the acquisition behavior of agroholdings? Performance analysis of agricultural acquisition targets in Northwest Russia and Ukraine

“…Among the indicators for capital strength, farm indebtedness is particularly noteworthy, as it has been named as a major factor in the farm acquisitions made by agroholdings in earlier studies (Visser et al, 2012;Wandel, 2011). In this context, our results demonstrate that Northwest Russian farms whose leverage ratio was high -at a level between 60-100% -indeed had higher odds of being acquired during the M&A wave (2009-2012) than the benchmark (reference) group.…”

“…The rapid expansion of agroholdings largely came about through quick acquisitions of other standalone farms (Matyukha et al, 2015), while this process of farm takeovers itself became possible due to favorable access to outside capital facilitated by the extensive economic and political ties of agroholdings (Petrick et al, 2013;Visser et al, 2012;Wandel, 2011). In turn, larger sizes and the ability to benefit from economies of size were found to improve agroholdings' access to external sources of capital and, thus, to reinforce agroholdings' growth through acquisitions and investments in technologies (Gagalyuk, 2017).…”

Governance of Production Co‐operatives in Russian Agriculture

“…The agricultural sector was characterised by rising input prices, malfunctioning agricultural markets, an insecure legal environment and a lack of self-help organisations. By 1998, agricultural output had declined by 60 per cent due to the sharp costprice squeeze which occurred after price liberalisation in 1992, as well as reduced and ultimately abolished food producer and consumer subsidies and decreased domestic demand caused by falling income (Wandel, 2011).…”

“…Political reforms, a more stable macro-economic framework and increased profitability of domestic food production induced significant investment in the food industry and some investment in agricultural production. Economic recovery profited thanks to windfall gains from the rise in the export price of oil and gas (Rozelle and Swinnen, 2004;Anderson and Swinnen, 2010;Wandel, 2011). Although Russia later experienced a remarkable rebound in agricultural production, its production value only reached about 80 per cent of the 1990 level.…”

Rediscovering the Virgin Lands: Agricultural Investment and Rural Livelihoods in a Eurasian Frontier Area

“…Following the post-1998 model of Russian agriculture (Rylko et al 2008;Wandel 2011), external investors started to control huge tracts of land and integrate several stages of the production process also in the NKGR. However, there are no official data which might permit reliable conclusions to be made about the significance of such agroholdings in Kazakhstan's agricultural and food economy, or in individual sectors.…”