Determinants of agricultural companies’ financial performance: The experience of Poland, Slovakia and Ukraine
-
DOIhttp://dx.doi.org/10.21511/imfi.20(1).2023.10
-
Article InfoVolume 20 2023, Issue #1, pp. 99-111
- Cited by
- 749 Views
-
350 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
The purpose of the study is to conduct a comparative analysis of the determinants affecting the financial performance of agricultural enterprises in Poland, Slovakia and Ukraine. As the main research method, panel data regression analysis was used to analyze data from 34 Polish, 123 Slovak, and 305 Ukrainian agricultural companies for the period 2017–2020. To analyze the links between financial performance measures and its determinants, nine models were developed based on three selected dependent variables (Return on Assets, Return on Equity, Return on Sales) in each of the countries studied. Seven independent variables were used, such as Leverage, Long-Term Debt to Assets, Short-Term Debt to Assets, Debt to Equity, Current Ratio, Asset Tangibility, Capital Intensity, and two control variables such as Size and Dummy variable for legal form. The most significant impact on the financial performance of agricultural enterprises has: for Polish enterprises – Return on Assets – Leverage and Asset Tangibility, Return on Equity – Debt to Equity and Dummy variable for legal form, Return on Sales – Current Ratio, Capital Intensity, and Size; for Slovak enterprises – Return on Assets – Current Ratio, Return on Equity – Debt to Equity, Return on Sales – Current Ratio, and Capital Intensity; for Ukrainian enterprises – Return on Assets – Leverage and Size, Return on Equity – Debt to Equity, and Current Ratio, Return on Sales – Capital Intensity.
- Keywords
-
JEL Classification (Paper profile tab)G17, Q12, Q14
-
References49
-
Tables4
-
Figures0
-
- Table 1. Variable definitions, calculation and abbreviations
- Table 2. Descriptive statistics (based on observations: 1:1 – 34:4 (Poland); 1:1 – 123:4 (Slovakia); 1:1 – 305:4 (Ukraine))
- Table 3. Results of panel data estimate parameter selection for each of the models used
- Table A1. Model 1-9 (ROA, ROE, ROS). OLS, FEM, REM, using the observations: 1-136 (Poland); 1-492 (Slovakia); 1-1220 (Ukraine)
-
- Achaku, M. M., Agbeaze, E. K., Ekoja, G. O., & Asortse, S. (2022). Green entrepreneurship and performance of small and medium enterprises in North-Central Nigeria. Environmental Economics, 13(1), 126-140.
- Arfara, C., & Samanta, I. (2022). The impact of internal marketing philosophy on a firm’s strategic orientation. Innovative Marketing, 18(4), 48-61.
- Beyer, D., & Hinke, J. (2020). European benchmarking of determinants of profitability for companies with accrual accounting in the agricultural sector. Agricultural Economics – Czech, 66, 477-488.
- BUREAU van Dijk, A Moody’s Analytics Company. (n.d.). Orbis.
- Burja, V., & Burja, C. (2017). Financial performance and the business risk in agricultural sector of Romania. Annals of the “Constantin Brâncuşi” University of Târgu Jiu. Economy Series, 3, 75-82.
- Câmpeanu V. (2022). The effects of the war in Ukraine – the global food crisis becomes more real. EUROINFO - Revistă lunară, 6(1), 3-15.
- Davidenko, N., & Wasilewska, N. (2021). Zapewnienie równowagi finansowej przedsiębiorstw rolnych na Ukrainie. Zeszyty Naukowe SGGW, Polityki Europejskie, Finanse i Marketing, 26(75), 40-52.
- Enjolras, G., Sanfilippo, G., & Soliwoda, M. (2021). What determines the capital structure of farms? Empirical evidence from Poland. Baltic Journal of Economics, 21(2). 113-133.
- Fakhrunnas, F., Astuti, R. D., & Anto, M. B. H. (2022). Determinants of non-performing financing in Indonesian Islamic banks: A regional and sectoral analysis. Banks and Bank Systems, 17(4), 72-86.
- Fisun, I., Kucher, M., Stebliuk, N., Saihak, Y., & Prokopenko, O. (2022). Modeling development strategy of tourism companies under the influence of external and internal environment: Evidence from Ukraine. Tourism and Travelling, 4(1), 1-15.
- Gaisani, M. P., Fahmi, I., & Sasongko, H. (2021). The effect of COVID-19 on the financial performance of Indonesia’s livestock industry. Jurnal Manajemen & Agribisnis, 18(3).
- Glauben, T., Svanidze, M., Götz, L., Prehn, S., Jaghdani, T.J., Đurić, I., & Kuhn, L. (2022). The war in Ukraine, agricultural trade and risks to global food security. Intereconomics, 57(3), 157-163.
- Góral, J., & Soliwoda, M. (2021). On the profitability of Polish large agricultural holdings. Acta Oeconomica, 71(1), 137-159.
- Hampl, F. (2020). A statistical analysis of the financial performance of organic and conventional farms in the Czech Republic with respect to their size. Agricultural Economics – Czech, 66, 1-9.
- Hazudin, S. F., Sabri, M. F., Kader, M. A. R. A., Saripin, M. S., & Ridzuan, M. R. (2022). Social capital, entrepreneurial skills, and business performance among rural micro-enterprises in times of crisis. Knowledge and Performance Management, 6(1), 75-86.
- Ievdokymov, V., Ostapchuk, T., Lehenchuk, S., Grytsyshen, D., & Marchuk, G. (2020). Analysis of the impact of intangible assets on the companies’ market value. Naukovyi Visnyk Natsionalnoho Hirnychoho Universytetu, 3, 164-170.
- Jusni, J., Aswan, A., Shafiai, M. H. M., Baharuddin, G., & Thaha, R. R. H. (2023). Key competitiveness of Indonesian small wooden furniture business. Innovative Marketing, 19(1), 59-71.
- Kalusova, L., & Badura, P. (2017). Factors determining the financial structure of Czech and Slovak agricultural enterprises. Agricultural Economics – Czech, 63, 24-33.
- Katchova, A. L., & Enlow, S. J. (2013). Financial performance of publicly-traded agribusinesses. Agricultural Finance Review, 73(1), 58-73.
- Kimetto, J. K., & Kiman, E. M. (2018). Determinants of Financial Performance of Agricultural Cooperative Societies in Baringo County, Kenya. International Journal of Management and Commerce Innovations, 5(2), 233-249.
- Knežević, G., Pavlović, V., & Bojičić, R. (2017). Does the board gender diversity impact financial performance in agriculture? Case of Serbian agriculture companies listed on stock exchange. Custos e Agronegocio, 13(3), 2-20.
- Kravčáková Vozárová, I., Kotulič, R., & Vavrek, R. (2019). Disparities in the financial performance of agricultural entities according to the legal form: the case of Slovakia. Applied Economics, 51(56), 5999-6008.
- Kuznyetsova, A., Boiarko, I., Khutorna, M., & Zhezherun, Y. (2022). Development of financial inclusion from the standpoint of ensuring financial stability. Public and Municipal Finance, 11(1), 20-36.
- Lehenchuk, S., Raboshuk, A., Valinkevych, N., Polishchuk, I., & Khodakyvskyy, V. (2022). Analysis of financial performance determinants: evidence from Slovak agricultural companies. Agricultural and Resource Economics: International Scientific E-Journal, 8(4), 66-85.
- Liu, L., Xu, J., & Shang, Y. (2020). Determining factors of financial performance of agricultural listed companies in China. Custos e Agronegocio, 16(4), 297-314.
- Mann, R., & Bilyk, A. (2017). Monitoring the factors influencing the efficiency of agricultural enterprises’ working capital of Ukraine. Problems and Perspectives in Management, 15(4), 161-167.
- Martins, F. S., & Lucato, W. C. (2018). Structural production factors’ impact on the financial performance of agribusiness cooperatives in Brazil. International Journal of Operations & Production Management, 38(3), 606-635.
- Mijić, K., & Jakšić, D. (2017). The determinants of agricultural industry profitability: evidence from southeast Europe. Custos e Agronegocio On Line, 13(1), 154-173.
- Mishra, A., Wilson, C., & Williams, R. (2009). Factors Affecting Financial Performance of New and Beginning Farmers. Agricultural Finance Review, 69, 160-179.
- Misiąg, W., Tomasz, S., & Rodzinka, J. (2020). Financial effectiveness and productivity of the agricultural sector in Poland. Financial Internet Quarterly (formerly e-Finanse), 16(4), 65-81.
- Msomi, T. S., & Olarewaju, O.M. (2022). Dynamic panel investigation of the determinants of South African commercial banks’ operational efficiency. Banks and Bank Systems, 17(4), 35-49.
- Naushad, M. (2022). SME innovation and employee creativity: The role of entrepreneurial leadership. Problems and Perspectives in Management, 20(4), 560-572.
- Novotná, M., & Volek, T. (2015). Efficiency of Production Factors and Financial Performance of Agricultural Enterprises. AGRIS on-line Papers in Economics and Informatics, 7(4), 91-99.
- Odalo, S. K., Achoki1, G., & Njuguna, A. (2016). Relating Company Size and Financial Performance in Agricultural Firms Listed in the Nairobi Securities Exchange in Kenya. International Journal of Economics and Finance, 8(9), 34-40.
- Piluso, N., & Heron, E. L. (2022). The macroeconomic effects of climate policy: A Keynesian point of view. Environmental Economics, 13(1), 16-27.
- Pokharel, K. P., Archer, D. W., & Featherstone, A. M. (2020). The Impact of Size and Specialization on the Financial Performance of Agricultural Cooperatives. Journal of Co-operative Organization and Management, 8(2).
- Pronko, L., Furman, I., Kucher, A., & Gontaruk, Y. (2020). Formation of a state support program for agricultural producers in Ukraine considering world experience. European Journal of Sustainable Development, 9(1), 364.
- Serpeninova, Yu., Lehenchuk, S., Mateášová, M., Ostapchuk, T., & Polishchuk, I. (2022). Impact of intellectual capital on profitability: Evidence from software development companies in the Slovak Republic. Problems and Perspectives in Management, 20(2), 411-425.
- Shubita, M.F. (2022). Intellectual capital and industrial firms’ growth: Evidence from Jordanian manufacturing listed firms. Problems and Perspectives in Management, 20(3), 325-334.
- Shubravska, O., & Prokopenko, K. (2022). The Agricultural Sector of Ukraine in the Global Food Market: Pre-war State and Post-war Prospects. Research on World Agricultural Economy, 3(4), 693.
- Singh, K., Misra, M., Kumar, M., & Tiwari, V. (2019). A study on the determinants of financial performance of U.S. agricultural cooperatives. Journal of Business Economics and Management, 20(4), 633-647.
- Sokil, O., Kucherkova, S., Kostyakova, A., Podolchak, N., Sokil, Y., & Shkvyria, N. (2022). The Context of “Globalization Versus Localization” After the World Pandemic and Quarantine. In S. G. Yassen (Ed.), Digital Economy, Business Analytics, and Big Data Analytics Applications. Studies in Computational Intelligence, 1010. Springer, Cham.
- Sukhonos, V., Makarenko, I., Serpeninova, Y., & Qasimova, G. (2018). Classification and prioritization of stakeholders’ information requests according to sustainable development goals: Case of cross-sector partnership in Ukrainian food production industry. Problems and Perspectives in Management, 16(4), 126-140.
- Vorobei, R. (2022). Determinants of Ukrainian agro-industrial companies’ stock price movements. Intellectual Economics, 16(1), 24-40.
- Vuković, B., Milutinović, S., Mijić, K., Krsmanović, B., & Jaksic, D. (2022). Analysis of financial performance determinants: evidence from the European agricultural companies. Custos e Agronegocio, 18(1), 285-306.
- Xu, J., & Jin, Z. (2022). Exploring the Impact of the COVID-19 Pandemic on Firms’ Financial Performance and Cash Holding: New Evidence from China’s Agri-food Sector. Agronomy, 12, 1951.
- Xu, J., & Zhang, Y. (2021). Does Intellectual Capital Measurement Matter in Financial Performance? An Investigation of Chinese Agricultural Listed Companies. Agronomy, 11, 1872.
- Xu, J., Sun, Zh., & Shang, Y. (2021). Capital structure and financial performance in China’s agricultural sector: a panel data analysis. Custos e Agronegocio, 17(2), 445-463.
- Yavorska, T., Voytovych, L., & Voytovych, D. (2022). The impact of macroeconomic factors on the development of the insurance system in Ukraine. Insurance Markets and Companies, 13(1), 21-35.