Economic Analysis: Theory and Practice

A factor analysis of the Russian oil and gas sector development based on the sustainable growth rate (SGR) model

Vol. 15, Iss. 1, JANUARY 2016

Received: 10 September 2015

Received in revised form: 14 October 2015

Accepted: 25 October 2015

Available online: 24 January 2016


JEL Classification: G31, G32

Pages: 131-142

Trachenko M.B. State University of Management, Moscow, Russian Federation

Kozhechkina E.V. Plekhanov Russian University of Economics, Moscow, Russian Federation

Importance Planning and securing the future growth should match companys financial capabilities. Efficient management of company's growth leads to an increment in business value, whereas unbalanced growth entails resource deterioration and the risk of debt burden increase.
Objectives The aim is to analyze all factors influencing the Russian oil and gas sector development based on the sustainable growth rate (SGR) model.
Methods The study rests on the comparative analysis of indicators, models and approaches that are employed in business growth management. We also apply the factor analysis of financial statements of companies operating in the Russian oil and gas sector based on the SGR model to find dependencies between the increment rate of revenue and the sustainable growth rate.
Results Over 20092013, SGR of the said companies varied from 10% to 76%. It was conditioned by unstable key financials influencing the growth of business. The lowest SRG was in 2014, being indicative of serious impact of negative factors of oil and gas sector development on balanced growth.
Conclusions The findings show that actual growth of revenue is higher than SRG. In other words, enterprises ignored financial limitations of the SRG model and took high risks. The factor analysis of SRG dynamics and its correlation with real growth ratio did not reveal general trends. This is likely to reflect the influence of political decisions on companies operations and different conditions of attracting debt capital, especially over recent years.

Keywords: sustainable growth rate model, SGR, oil and gas sector, growth management, Higgins Model


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