This paper is a first attempt to examine the role played by the geography on agrarian firms' valuations. The geography was evaluated through the physical proximity from agrarian companies to other companies and to some strategic points which ease their accessibility to external economic agents. To get our purpose, we developed an empirical application on a sample of non-listed agrarian Spanish companies located in the region of Murcia over the period 2010-2015. We applied Discount Cash Flow methodology for non-listed companies to get their valuations. With this information, we used spatial econometric techniques to analyse the spatial distribution of agrarian firms' valuations and model the behavior of this variable. Our results supported the assertion that agrarian firms' valuations are conditioned by the geography. We found that firms with similar valuations tend to be grouped together in the territory. In addition, we found significant effects on agrarian firms valuations derived from the geographical proximity among closer agrarian companies and from them to external agents and transport facilities.

A common prerequisite in valuation analysis is the availability of temporal information on financial variables. Nevertheless, reduced size companies-representing more than 98% on current productive systems- fail to have available temporal information to estimate valuations. In this paper, we offer a procedure for estimating reduced size companies’ values under the hypothesis that spatial behaviour matters for valuations. With this aim, we present the theoretical background for this hypothesis and introduce a spatial proposal with a case study of industrial companies where the significant role of space on firms’ valuations is previously tested. This analysis shows the relevance of spatial information in firms’ valuation confirming the predictive capability of our approach applying the out of sample methodology

The Discounted Cash Flow (DCF) model, similar to other firm valuation models, uses temporal information for a firm to forecast future results. However, the lack of temporal information for many companies hinders the application of the DCF model. To overcome this limitation, we proposed an approach based on the spatial information of the analysed companies. In particular, to get firms’ valuation our approach combined both data from companies that are geographically proximal to the analysed company and data from the analysed company. Based on this approach, we provided an empirical example to demonstrate that the economic value computed with our proposal, the Spatial-Firm Economic Value, was consistent with the traditional economic value after application of the DCF model. In particular, we found a minimal difference in terms of absolute deviations between our proposal and the firm’s valuation applying traditional valuation techniques. Thus, this study demonstrated the relevance of considering the spatial dimension as an additional source of information to determine firms’ value in the Fruit subsector when there is not available temporal information to apply traditional valuation methods.

Purpose The purpose of this paper is to provide evidence about the role of the geography on agri-food firms’ valuations. The goal is to test clusters and agglomeration effects on the SMEs valuations. Design/methodology/approach The authors propose an empirical test applying a spatial regression analysis on a sample constitute by 306 agri-food SMEs located in two municipalities with different economic characteristics: Murcia and Madrid. In addition, the authors applied the discounted cash flow model in order to estimate the SMEs’ economic value. Findings The findings show the importance of the geography variables on the SMEs’ performances highlights interesting differences between territories. In particular, the results confirm that the geographical proximity between agri-food firms and between them and external agents is significant on firms’ valuations. The agglomeration effects are verified in both municipality but the density variable present a negative non-linear effect confirming previous studies which indicates that the existence of a large number of firms 05 rise competition, decreasing the economic opportunities of these companies. Originality/value This study gives interesting insights to policymakers, researchers and practitioners concerning the importance of the relationships among agents, also favoured by a developed infrastructures system in a fully connected environment.

Resumen 18tradicionales. La aproximación al valor de estas empresas se basa en la información obtenida de las empresas de su entorno así como de sus características. En este caso, proponemos un ejemplo y calculamos las posibles desviaciones entre el valor calculado con las técnicas tradicionales de valoración y nuestra propuesta obteniendo una diferencia mínima. Finalmente y como consecuencia de los resultados anteriores, presentamos una serie de implicaciones y conclusiones que deberán ser consideradas en futuras investigaciones en esta área de estudio. national average value, however, spatial interactions between geographically close peer companies is not as intense as in Madrid. But, in Murcia, the geographical proximity to technological centres and universities is the relevant geographical factor for improving the valuation of agri-food companies. Therefore, the results of this second analysis suggest that taking in account the environmental characteristic in which agri-food companies are located is fundamental to determine their values. In the Chapter 4 of this dissertation, we propose a method to estimate firms' valuations of companies without available temporal information to apply the traditional DCF. For example, micro-sized companies that present simplified financial statements and new companies that have not data for a long number of years often presents this deficiency in information. To overcome this limitation, we propose a method that combines both data from geographically close companies to the analysed company and financial data from the studied company to obtain an economic value. This purpose is based on DFCs' valuations This dissertation contributes to the current financial literature in different aspects finding some promising results for the development of future research in this field. Our studies determine that geography is a relevant factor to be considered in different valuation methods. Even, it could be a powerful tool to overcome the limitations found in the traditional valuation methods and propose new procedures based on geographical information.