Agric. Econ. - Czech, 2026, 72(3):171-189 | DOI: 10.17221/385/2024-AGRICECON

What drives post-acquisition farm growth? Empirical evidence from UkraineOriginal Paper

Igor Ostapchuk ORCID..., Taras Gagalyuk ORCID...
Leibniz Institute of Agricultural Development in Transition Economies (IAMO), Halle, Germany

This study contributes to the limited body of research on mergers and acquisitions in primary agriculture by examining how large corporate agroholdings achieve profitable post-acquisition growth for the farms they acquire. Using System GMM estimation, we analyse farm-level data from 648 farms acquired by agroholdings in Ukraine between 2005 and 2016. Our findings show that agroholdings facilitate post-acquisition growth and performance improvements by employing several integration strategies. Specifically, they leverage horizontally integrated structures to: (i) consolidate land resources of acquired farms to achieve scale economies; (ii) reallocate farm resources toward more profitable production lines; and (iii) intensify production on acquired farms. These results support established firm growth theories, namely, the independence of firm growth rates from firm size (Gibrat's law) and the existence of Penrosean limits to growth.

Keywords: agroholdings; farm resources; mergers and acquisitions; organic growth; post-acquisition integration

Received: October 10, 2024; Revised: November 7, 2025; Accepted: November 19, 2025; Prepublished online: March 23, 2026; Published: March 31, 2026  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Ostapchuk I, Gagalyuk T. What drives post-acquisition farm growth? Empirical evidence from Ukraine. Agricultural Economics. 2026;72(3):171-189. doi: 10.17221/385/2024-AGRICECON.
Share...
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    Supplementary files:

    Download fileESM_385-2024_AE.pdf

    File size: 162.67 kB

    References

    1. Anand J., Singh H. (1997): Asset redeployment, acquisitions and corporate strategy in declining industries. Strategic Management Journal, 18: 99-118. Go to original source...
    2. Arellano M., Bover O. (1995): Another look at the instrumental variable estimation of error components models. Journal of Econometrics, 68: 29-51. Go to original source...
    3. Bodner J., Capron L. (2018): Post-merger integration. Journal of Organization Design, 7: 3. Go to original source...
    4. Bokusheva R., Bezlepkina I., Lansink A.O. (2009): Exploring farm investment behaviour in transition: The case of Russian agriculture. Journal of Agricultural Economics, 60: 436-464. Go to original source...
    5. Bottazzi G., Secchi A. (2006): Explaining the distribution of firm growth rates. The RAND Journal of Economics, 37: 235-256. Go to original source...
    6. Boubakri N., Cosset J.-C., Saffar W. (2013): The role of state and foreign owners in corporate risk-taking: Evidence from privatization. Journal of Financial Economics, 108: 641-658. Go to original source...
    7. Buduru B., Brem M. (2007): Transaction costs, strategic interaction, and farm restructuring. Agricultural Economics, 37: 67-80. Go to original source...
    8. Bruton G. D., Oviatt B. M., White, M. A. (1994): Performance of acquisitions of distressed firms. Academy of Management Journal, 37(4): 972-989. Go to original source...
    9. Capron L. (1999): The long-term performance of horizontal acquisitions. Strategic Management Journal, 20: 987-1018. Go to original source...
    10. Capron L., Dussauge P., Mitchell W. (1998): Resource redeployment following horizontal acquisitions in Europe and North America. Strategic Management Journal, 19: 631-661. Go to original source...
    11. Capron L., Mitchell W. (1997): Bilateral resource redeployment and capabilities improvement following horizontal acquisitions. Industrial and Corporate Change, 7: 453-484. Go to original source...
    12. Capron L., Pistre N. (2002): When do acquirers earn abnormal returns? Strategic Management Journal, 23(9): 781-794. Go to original source...
    13. Chan L.K.C., Karceski J., Lakonishok J. (2003): The level and persistence of growth rates. The Journal of Finance, 58: 643-684. Go to original source...
    14. Chavas J.-P. (1994): Production and investment decisions under sunk cost and temporal uncertainty. American Journal of Agricultural Economics, 76: 114-127. Go to original source...
    15. Davidsson P., Steffens P., Fitzsimmons J. (2009): Growing profitable or growing from profits: Putting the horse in front of the cart? Journal of Business Venturing, 24: 388-406. Go to original source...
    16. Delmar F. (1997): Measuring growth: Methodological considerations and empirical results. In: Donckels R., Miettinen A. (eds): Entrepreneurship and SME research: On Its Way to the Next Millennium. Aldershot, Ashgate: 99-216.
    17. FAO (2022): The Importance of Ukraine and the Russian Federation for Global Agricultural Markets and the Risks Associated with the Current Conflict. Rome, FAO. Available at https://www.fao.org/3/cb9236en/cb9236en.pdf (accessed November 6, 2025).
    18. Gagalyuk T., Meyers W., Balmann A. (2021): Growth of agroholdings and mega-farms in transition and emerging market economies: Institutional and organizational aspects - Editorial. International Food and Agribusiness Management Review, 24: 581-592. Go to original source...
    19. Gardebroek C., Turi K.N., Wijnands J.H.M. (2010): Growth dynamics of dairy processing firms in the European Union. Agricultural Economics, 41: 285-291. Go to original source...
    20. Geroski P.A. (1999): The Growth of Firms in Theory and Practice. CEPR Discussion paper No. 2092. Paris and London, Centre for Economic Policy Research.
    21. Geroski P.A., Gugler K. (2004): Corporate growth convergence in Europe. Oxford Economic Papers, 56: 597-620. Go to original source...
    22. Gibrat R. (1931): Les inégalités économiques: applications: aux inégalités des richesses, à la concentration des entreprises, aux populations des villes, aux statistiques des familles, etc. d'une loi nouvelle: la loi de l'effet proportionnel. Paris, Sirey: 1-296. (in French)
    23. Gilbert B.A., McDougall P.P., Audretsch D.B. (2006): New venture growth: A review and extension. Journal of Management, 32: 926-950. Go to original source...
    24. Hart P.E. (2000): Theories of firms' growth and the generation of jobs. Review of Industrial Organization, 17: 229-248. Go to original source...
    25. Hitt M.A., Hoskisson R.E., Ireland R.D., Harrison J.S. (1991): Effects of acquisitions on R&D inputs and outputs. Academy of Management Journal, 34: 693-706. Go to original source...
    26. Hýblova E. (2014): Analysis of mergers in Czech agriculture companies. Agricultural Economics - Czech, 60: 441-448. Go to original source...
    27. Jang S., Park K. (2011): Inter-relationship between firm growth and profitability. International Journal of Hospitality Management, 30: 1027-1035. Go to original source...
    28. Kaen F.R., Baumann H.D. (2003): Firm size, employees and profitability in US manufacturing industries. Social Science Research Network. Go to original source...
    29. Lansink A.O., Stefanou S.E. (1997): Asymmetric adjustment of dynamic factors at the firm level. American Journal of Agricultural Economics, 79: 1340-1351. Go to original source...
    30. Li X. (2013): Productivity, restructuring, and the gains from takeovers. Journal of Financial Economics, 109(1): 250-271. Go to original source...
    31. Lockett A., Wiklund J., Davidsson P., Girma S. (2010): Organic and acquisitive growth: Re-examining, testing, and extending Penrose's growth theory. Journal of Management Studies, 48: 48-74. Go to original source...
    32. Lubatkin M., O'Neill H.M. (1987): Merger strategies and capital market risk. The Academy of Management Journal, 30: 665-684. Go to original source...
    33. Matyukha A. (2017): Business Groups in Agriculture. Impact of Ownership Structures on Performance: The Case of Russia's Agroholdings. Studies on the Agricultural and Food
    34. Sector in Transition Economies, No. 85. Halle, IAMO.
    35. Matyukha A., Voigt P., Wolz A. (2015): Agro-holdings in Russia, Ukraine and Kazakhstan: temporary phenomenon or permanent business form? Farm-level evidence from Moscow and Belgorod regions. Post-Communist Economies, 27: 370-394. Go to original source...
    36. Nakano A., Kim D. (2011): Dynamics of growth and profitability: The case of Japanese manufacturing firms. Global Economic Review, 40: 67-81. Go to original source...
    37. Nickell S. (1981): Biases in dynamic models with fixed effects. Econometrica, 49: 1417-1426. Go to original source...
    38. Nivievskyi O., von Cramon-Taubadel S., Grueninger M. (2013): Ukraine: Agricultural Policy Review. Washington, D.C., World Bank.s
    39. Ostapchuk I., Gagalyuk T., Curtiss J. (2021a): Post-acquisition integration and growth of farms: The case of Ukrainian agroholdings. International Food and Agribusiness Management Review, 24: 615-636. Go to original source...
    40. Ostapchuk I., Gagalyuk T., Epshtein D., Dibirov A. (2021b): What drives the acquisition behavior of agroholdings? Performance analysis of agricultural acquisition targets in Northwest Russia and Ukraine. International Food and Agribusiness Management Review, 24: 593-613. Go to original source...
    41. Penrose E. (1995): The Theory of the Growth of the Firm. 2nd Ed. New York, Oxford University Press: 1-272. Go to original source...
    42. Petrick M., Wandel J., Karsten K. (2011): Farm Restructuring and Agricultural Recovery in Kazakhstan's Grain Region: An Update. Discussion Paper No.137. Halle, IAMO.
    43. Petrick M., Wandel J., Karsten K. (2013): Rediscovering the virgin lands: Agricultural investment and rural livelihoods in a Eurasian frontier area. World Development, 43: 164-179. Go to original source...
    44. Rasmussen S. (2012): Production economics: The Basic Theory of Production Optimisation. Heidelberg, Springer Berlin: 1-292.
    45. Robson P.J.A., Bennett R.J. (2000): SME growth: The relationship with business advice and external collaboration. Small Business Economics, 15: 193-208. Go to original source...
    46. Roodman D. (2009): How to do xtabond2: An introduction to difference and system GMM in Stata. The Stata Journal, 9: 86-136. Go to original source...
    47. Samuels J.M., Smyth D.J. (1968): Profits, variability of profits and firm size. Economica, 35: 127-139. Go to original source...
    48. Shepherd D., Wiklund J. (2009): Are we comparing apples with apples or apples with oranges? Appropriateness of knowledge accumulation across growth studies. Entrepreneurship Theory and Practice, 33: 105-123. Go to original source...
    49. Shrivastava P. (1986): Postmerger integration. Journal of Business Strategy, 7: 65-76. Go to original source...
    50. Spark Interfax (2019): Verification, Analysis and Monitoring of Companies. [Dataset]. Available at https://spark-interfax.com/ (accessed February 19, 2019).
    51. SSSU (2011): Producer Price Indices in 2010. Statistical publication. Kyiv, State Statistics Service of Ukraine. Available at https://ukrstat.gov.ua/druk/katalog/price/IZV_2010.zip
    52. SSSU (2017): Producer Price Indices in 2016. Statistical publication. Kyiv, State Statistics Service of Ukraine. Available at https://ukrstat.gov.ua/druk/publicat/kat_u/2017/zb/03/zb_itsv2016pdf.zip
    53. Steigenberger N. (2017): The challenge of integration: A review of the M&A integration literature. International Journal of Management Reviews, 19: 408-431. Go to original source...
    54. Stettner U., Lavie D. (2014): Ambidexterity under scrutiny: Exploration and exploitation via internal organization, alliances, and acquisitions. Strategic Management Journal, 35: 1903-1929. Go to original source...
    55. UCAB (2019): Large Farm Management Book. Kyiv, UCAB. Available at http://ucab.ua/en/lfm_book (accessed February 13, 2020).
    56. Varrotti A.P.S., Ramirez D.C., Serpe P.C. (2022): Land grabbing and agribusiness in Argentina: Five critical dimensions for analysing corporate strategies and its impacts over unequal actors. Review of Agricultural, Food and Environmental Studies, 103: 417-437. Go to original source... Go to PubMed...
    57. Walther S. (2014): Determinants of Competitiveness of Agriholdings and Independent Farms in Ukrainian Arable Production. Thuenen Report No.15. Braunschweig, Thuenen.
    58. Weiss C. (1998): Size, growth, and survival in the upper Austrian farm sector. Small Business Economics, 10: 305-312. Go to original source...
    59. Windmeijer F. (2005): A finite sample correction for the variance of linear efficient two-step GMM estimators. Journal of Econometrics, 126: 25-51. Go to original source...
    60. YouControl (2019): Business plan YouControl - A full profile of every business in Ukraine. [Dataset]. Available at https://youcontrol.com.ua/en/ (accessed February 18, 2019).

    This is an open access article distributed under the terms of the Attribution-NonCommercial 4.0 International (CC BY-NC 4.0.), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content