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Abstract

The paper investigates the significance of risk, external and internal transaction costs in the agriculture of the Tatarstan Republic. The analysis is conducted for two categories of organ-isational forms, independent farms and members of agroholdings. Although average prices do not differ among organisational forms, the results indicate that external transaction costs are more pronounced in independent farms, whereas agroholding membership entails higher in-ternal transaction costs, thereby making agroholdings more vulnerable to inefficiency than independent farms. In addition, the estimation suggests that this higher inefficiency results from the more enhanced risk management in agroholding members. Since this strategy leads to a more intensive factor use, members of business groups are able to allocate inputs so as to increase production at the same time.

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