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Approaching the losses caused by imperfect short-term financing at the Russian farms

Author

Listed:
  • Irina V. Bezlepkina

    (Wageningen University, the Netherlands)

  • Nikolai M. Svetlov

    (Moscow Agricultural Timiryazev Academy, Russia)

Abstract

This study investigates whether an insufficient short-term financing causes losses for Russian agricultural farm and what is their upper boundary. The modified Bayesian formalism provides a workaround for scarce and in-complete data in our data set. This formalism is incorporated into the objective function of an optimisation model so that this function expresses the empirical dependence of profit on cash flow and debts. The model seeks for the optimal quarterly cash flow distribution within a year. Empirical application employs the data from 60 quarterly reports of six agricultural enterprises in the Moscow Region in 1995-1998. The losses per total farm expenses vary from 2.2 to 42.6% depending on a farm and a year. In more than a half of cases they are greater than 10%. The opportunities to improve farm financial performance can be revealed from individual changes in the quarterly cash flow distribution.

Suggested Citation

  • Irina V. Bezlepkina & Nikolai M. Svetlov, 2000. "Approaching the losses caused by imperfect short-term financing at the Russian farms," Econometrics 0004006, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpem:0004006
    Note: Type of Document - Acrobat PDF; prepared on IBM PC / Windows 98; pages: 10 ; figures: included
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/em/papers/0004/0004006.pdf
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    References listed on IDEAS

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    1. Geweke, John, 1989. "Bayesian Inference in Econometric Models Using Monte Carlo Integration," Econometrica, Econometric Society, vol. 57(6), pages 1317-1339, November.
    2. Macours, Karen & Swinnen, Johan F. M., 2000. "Causes of Output Decline in Economic Transition: The Case of Central and Eastern European Agriculture," Journal of Comparative Economics, Elsevier, vol. 28(1), pages 172-206, March.
    3. Pederson, Glenn D. & Brooks, Karen M. & Lekhtman, Oleg P., 1998. "Russian Farm Enterprise Performance And Restructuring: A Debt Problem Or A Profitability Problem?," Working Papers 14416, University of Minnesota, Center for International Food and Agricultural Policy.
    4. Gow, Hamish R & Swinnen, Johan F M, 1998. "Up- and Downstream Restructuring, Foreign Direct Investment, and Hold-Up Problems in Agricultural Transition," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 25(3), pages 331-350.
    5. David Epstein & Peter Tillack, 1999. "How Russian Agricultural Enterprises Are Surviving: The Financial Status of Large Agricultural Enterprises in the St. Petersburg Region," Eastern European Economics, Taylor & Francis Journals, vol. 37(5), pages 52-92, October.
    6. Luc Moers, 1999. "What determines Enterprise Performance in Russia? A Survey of the Evidence," Tinbergen Institute Discussion Papers 99-077/2, Tinbergen Institute.
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    More about this item

    Keywords

    imperfect short-term financing losses Russian agriculture Bayesian scarce missed data;

    JEL classification:

    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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