Location effects on the evaluation of small and medium enterprises: empirical applications on the agrarian sector

Abstract

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.