Geographical proximity on the valuations of unlisted agrarian companies: Does distance from company to company and to strategic points matter?

Abstract

This paper is a first attempt to examine the role played by the geography on agrarian firms' valuations. The geography was evaluated through the physical proximity from agrarian companies to other companies and to some strategic points which ease their accessibility to external economic agents. To get our purpose, we developed an empirical application on a sample of non-listed agrarian Spanish companies located in the region of Murcia over the period 2010-2015. We applied Discount Cash Flow methodology for non-listed companies to get their valuations. With this information, we used spatial econometric techniques to analyse the spatial distribution of agrarian firms' valuations and model the behavior of this variable. Our results supported the assertion that agrarian firms' valuations are conditioned by the geography. We found that firms with similar valuations tend to be grouped together in the territory. In addition, we found significant effects on agrarian firms valuations derived from the geographical proximity among closer agrarian companies and from them to external agents and transport facilities.

The identification of geographical factors on the determination of the value of agri-food companies

“…In particular, they apply spatial autocorrelation statistics to test whether agrarian land prices depend on their neighbours' prices (Houston, 2005;Maddison, 2009;Hussain et al, 2013;Ovando et al, 2017). Moreover, we also find studies considering geographical distances from agri-food companies to their nearest city or the population density of the territory where the company is located on the valuation of these companies (Cho et al, 2010;Salois et al, 2012;Occhino and Maté, 2017). These studies are developed on the hypothesis that the geographical positioning of the company in relation to external economic agents gives some benefits to these firms, which can be observed from their values.…”

A proposal to estimate the valuation of small and medium size companies using geographically comparable information

“…In this sense, an interesting specification is proposed by Rojo andGarcía (2005, 2006). The difference between Rojo andGarcía (2005, 2006)'s approach and that commonly used based on the Capital Asset Pricing Model (CAPM) is the addition of a specific risk premium in order to take into account the higher risk faced by non-listed companies when compared to their listed counterparts (Occhino and Maté, 2017). Rojo andGarcía (2005, 2006) compute the k e adding a specific risk P e .…”

Основні Питання Оцінки Вартості Сільськогосподарського Підприємства

“…Це підвищить специфічний ризик такого підприємства, зменшуючи його вартість. Коли підприємство співпрацює із суб'єктами з добрими економічними та фінансовими показниками, буде спостерігатися зворотна ситуація [7]. Звідси випливає, що ринкова вартість агробізнесу, що географічно перебуває в оточенні прибуткових підприємств, буде значно вищою, ніж той бізнес, що діє серед менш фінансово успішних суб'єктів.…”

“…Зарубіжні вчені останнім часом приділяли багато уваги дослідженню методології оцінки вартості сільськогосподарського бізнесу. Зокрема, P. Occhino, M. Maté дослідили зв'язок відстані між аграрними підприємствами з величиною їх оцінної вартості [7]. Проблематику застосування методу мультиплікаторів досліджують R. Vidal, J. Ribal, спірним питанням вони вважають контраст між основними та біржовими мультиплікаторами [8].…”