Vol. 14 No. 1 (2025)
Full Research Articles

Do agroholdings cope better with the agency problem? Empirical evidence from corporate farms in Russia

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  • Alisher Tleubayev,
  • Yerzhan Syzdykov
Alisher Tleubayev
Graduate School of Public Policy, Nazarbayev University, Kabanbay batyr avenue 53, 010000 Astana, Kazakhstan
Yerzhan Syzdykov
Business School, SDU University, 1/1 Abylai Khan Street, Kaskelen, Almaty, Kazakhstan
DOI: https://doi.org/10.36253/bae-16199

Published 2024-11-23

Keywords

  • agroholding,
  • corporate farm,
  • agency cost,
  • farm performance,
  • Russia

How to Cite

Tleubayev, A., & Syzdykov, Y. (2024). Do agroholdings cope better with the agency problem? Empirical evidence from corporate farms in Russia. Bio-Based and Applied Economics, 14(1), 37–47. https://doi.org/10.36253/bae-16199

Copyright (c) 2025 Alisher Tleubayev, Yerzhan Syzdykov

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

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Abstract

The agricultural industry in Russia demonstrated a notable growth since 2010. Russian policymakers strive to further increase agricultural production and set new targets for the industry for the years ahead. While agroholdings are regarded as one of the main driving forces behind the recent success in the agricultural sector, they are also believed to be the main locomotive that will move agriculture towards the set goals. In spite of their growing importance, the literature on agroholdings is still relatively immature and fails to provide clear evidence of their financial efficiency as opposed to non-agroholding farms. The current study utilizes a manually sourced longitudinal dataset of 203 corporate farms in Russia and provides a new empirical evidence on the financial performance of agroholding farms through the prism of an agency problem. Our findings reveal a significant positive relationship between agroholding membership and financial performance, as indicated by two accounting indicators – return on assets (ROA) and return on sales (ROS). We further observe that agroholdings face lower agency costs, which to a certain extent, explain their higher financial performance compared to stand-alone farms. The study offers empirical recommendations for policymakers and corporate executives in the Russian agricultural sector.

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