IS CAPITAL STRUCTURE IMPORTANT FOR THE VALUE OF AGRO-FOOD CORPORATIONS IN SERBIA?

Authors

  • Marina Janković-Perić Western Serbia Academy of Applied Studies, Valjevo
  • Dejan Jovanović Faculty of Economics University of Kragujevac, Kragujevac
  • Aleksandra Fedajev Technical Faculty in Bor, Bor

DOI:

https://doi.org/10.5937/ekoPolj2202425J

Keywords:

capital structure, corporation value, investment project profitability, the agro-food sector, developing economy

Abstract

The research aims to consider the nature of the influence of capital structure on the value of the corporations from the agro-food sector in Serbia. A panel regression analysis was used to test the hypotheses. The research covered the period from 2011 to 2018, and the sample consisted of 14 agro-food corporations whose shares are on the regulated market of the Belgrade Stock Exchange. The obtained results indicate that the capital structure has a statistically significant impact on the value of agro-food corporations and that the profitability of investment projects determines the nature of that impact. Consequently, the financial managers of agro-food corporations must consider the decision on the choice of capital structure as one of the key issues in the process of generating and increasing the corporation value.

Downloads

Download data is not yet available.

References

Berger, N. A., & Bonaccorsi di Patti, E. (2006). Capital Structure and Firm Performance: A New Approach to Testing Agency Theory and an Application to the Banking Industry. Journal of Banking and Finance, 30(4), 1065-1102. DOI: 10.1016/j.jbankfin.2005.05.015

Buluma, F.C.O., Kung’u J., & Gichohi. M.A. (2017). Capital structure and financial performance of dairy co-operative societies in Nakuru North Sub county, Kenya. International Journal of Economics, Commerce and Management, 5(7), 356-376. Retrieved from https://ijecm.co.uk/wp-content/uploads/2017/07/5723.pdf

Gajić, M., & Zekić, S. (2013). Development characteristics of agricultural sector in Serbia. In: Škorić, D., Tomić, D. and Popović, V. eds. Agri-Food Sector in Serbia – State and Challenge. Serbian Association of Agricultural Economics, pp. 73-90. DOI: 10.22004/ag.econ.157556

Grace, N. O., Sunday, M., & Monday Nweke, I. (2018). Capital structure and the performance of agricultural and agro-allied companies in Nigeria. Journal of Economics, Management & Social Science, 4(1), 120-131. Retrieved from https://www.researchgate.net/publication/326175702_CAPITAL_STRUCTURE_AND_THE_PERFORMANCE_OF_AGRICULTURAL_AND_AGRO-ALLIED_COMPANIES_IN_NIGERIA/link/5b3c7aac4585150d23f699c9/download

Siregar, R.Y.D., Anggraenl, L., & Pranowo, K. (2019). Impact of capital structure and firm financial performance on firm value: Evidence of agribusiness firms in Indonesia stock exchange, Russian Journal of Agricultural and Socio-Economic Sciences, 1(85), 445-451. Retrieved from https://rjoas.com/issue-2019-01/article_54.pdf

InunJariya, M.A. (2015). Effect of capital structure on profitability of food and beverage sectors in Sir Lanka. International Journal of Economic and Business Review, 3(11), 57-63. Retrieved from https://www.researchgate.net/publication/325857155_Impact_of_Capital_Structure_on_Financial_Performance_and_its_Determinants/link/5b29382baca27209f315cd95/download

Koteski, C., Josheski, D., & Magdinceva-Sopova, M. (2015). Tobin’s Q and R&D Investment in CESEE Countries, CEA Journal of Economics, 10(1), 81-98. Retrieved from https://eprints.ugd.edu.mk/14221/1/31-122-1-PB.pdf

Maria, N.O., & Udeh, S.N. (2019). Effect of Capital Structure on Financial Performance of Food and Beverage Companies in Nigeria (2007-2016). International Academy Journal of Management, Marketing and Entrepreneurial Studies, 7(1), 48-64. Retrieved from http://www.arcnjournals.org/images/ASA-IAJMMES-7-1-4.pdf

Manurung Suhadak Nila Firdausi Nuzula, D. S. (2014). The influence of capital structure on profitabiliti and firm value (A Study on food and beverage companies listed in Indonesia Stock Exchange 2010-2012 period). Jurnal Adimistrasi Bisnis, 7(2), 1-8. Retrieved from https://media.neliti.com/media/publications/79021-EN-the-influence-of-capital-structure-on-pr.pdf

McConnell, J. J., & Servaes, H. (1995). Equity Ownership and Two Faces of Debt. Journal of Financial Economics, 39(1), 131-157. DOI:10.1016/0304-405X(95)00824-X

Moki Masavi, J., Kiweu, M., & Kinyili J. (2017). Capital structure and financial performance of agricultural companies listed in Nairobi securities exchange, Kenya. International Journal of Economics, Commerce and Management, 5(11), 653-665. Retrieved from http://ijecm.co.uk/wp-content/uploads/2017/11/51138.pdf

Mugera, W.A., & Nyambane, G. G. (2014). Impact of debt structure on production efficiency and financial performance of Broadacre farms in Western Australia, Australian Journal of Agricultural and Resource Economics, 59, 208-224. DOI: 10.1111/1467-8489.12075

Sahari, S., Abdul Rahim, N., & Tinggi, M. (2019). Capital structure and firm performance: Evidence from food processing industry in Malaysia. Journal of Social Sciences Research, 5(2), 317-324. Retrieved from https://www.arpgweb.com/pdf-files/jssr5(2)317-324.pdf

Ranković, J. (2011). Kako su se promenili rentabilitetni i finansijski položaj u priveredi Srbije u 2010. godini, Ekonomika preduzeća, 59(5-6), 262-265. [in English: Ranković, J. (2011). How did the profitability and financial position in the economy of Serbia change in 2010? The Business economics, 59(5-6), 262-265.] Retrieved from https://scindeks-clanci.ceon.rs/data/pdf/0353-443X/2011/0353-443X1106262R.pdf

Simonovska, A., Gjosevski, D., & Campos, M. (2012). Capital structure and financial performance of agricultural companies – evidence from the Macedonian agricultural sector in transition. In New dimension and challenges of transition and post-transition processes in agriculture and food sector in the European Union and EU acceding and neighbouring countries, 132nd Seminar, October 25-27, 2012, Skopje, Republic of Macedonia, European Association of Agricultural Economists, DOI: 10.22004/ag.econ.139501

Stojadinović Jovanović, S., & Dašić, B. (2015). The importance of foreign direct investment for South East European countries’ agriculture. Economics of agriculture, 62(3), 661-676. DOI:10.5937/ekoPolj1503661S

Nguyen, T.T., Nguyen, P.H., Nguyen, B.K.L., Vu, T.N., & Le, U.T. (2020). The relationship between capital structure and firm value: case of listed companies in the food and beverages industry in Vietnam. Academy of Accounting and Financing Studies Journal, 24(1),1-12. Retrieved from https://www.abacademies.org/articles/the-relationship-between-capital-structure-and-firm-value-cases-oflisted-companies-in-the-food-and-beverages-industry-in-vietnam-9053.html

Stekla, J., & Grycova, M. (2016). The relationship between profitability and capital structrue of the agricultural holdings in the Czech Republic. Agricultural Economics, 62(9), 421-428. DOI:10.17221/232/2015-AGRICECON

Strategija poljoprivrede i ruralnog razvoja Republike Srbije za period 2014-2024, [in English: Strategy of Agriculture and Rural Development of the Republic of Serbia for the period 2014-2024] Retrieved from http://www.minpolj.gov.rs/download/strategija-poljoprivrede-i-ruralnog-razvoja-republike-srbije-za-period-2014-2024-godine (February 27, 2021)

Živanović, M. (2018). Analiza finansijskih performansi privrede Srbije. Kvartalni monitor. 52 (januar-mart), 58-67. [in English: Živanović, M. (2018). Analysis of financial performance of the Serbian economy. The Quarterly monitor. 52 (JanuaryMarch), 58-67.] Retrieved from https://fren.org.rs/wp-content/uploads/2019/04/Osvrt-2-1.pdf

Živanović, M. (2019). Analiza profitabilnosti privrede Srbije. Kvartalni monitor. 56 (januar-mart), 50-57. [in English: Živanović, M. (2019). Profitability analysis of the Serbian economy. The Quarterly monitor. 56 (January-March), 50-57.] Retrieved from https://fren.org.rs/wp-content/uploads/2019/10/Osvrt-1.pdf

Downloads

Published

2022-06-30

How to Cite

Janković-Perić, M., Jovanović, D. ., & Fedajev, A. . (2022). IS CAPITAL STRUCTURE IMPORTANT FOR THE VALUE OF AGRO-FOOD CORPORATIONS IN SERBIA?. Ekonomika Poljoprivrede, 69(2), 425–439. https://doi.org/10.5937/ekoPolj2202425J

Issue

Section

Original scientific papers