INFLUENCE OF THE INTEGRATION OF AGROHOLDINGS WITH RUSSIAN FARMS ON TOTAL FACTOR PRODUCTIVITY AND ITS SUBCOMPONENTS

The impact of group affiliation to agroholdings on enterprise performance in terms of productivity and efficiency is controversially discussed in the literature. However, only few papers evaluate the effects of group membership on the productivity and efficiency of agricultural enterprises in Russia. The underlying research question of this paper is therefore whether farms that belong to agroholdings perform better than independent farms. We calculate partial land and labor productivity, total factor productivity (TFP) and technical efficiency scores for the two categories of independent farms and members of agroholdings. In this paper a production function approach is estimated in the framework of stochastic frontier analysis. The results are used to decompose TFP into a technological change effect and a technical efficiency effect. The results show a different trend than observed in previous studies. We show that the growth of agroholdings’ TFP exceeds by far the development of the TFP of independent farms and that group affiliation has a positive impact on the performance of farms.