Hostname: page-component-586b7cd67f-rcrh6 Total loading time: 0 Render date: 2024-11-26T14:14:44.712Z Has data issue: false hasContentIssue false
  • English
  • Français

The Impact of Integration Strategies on Food Business Firm Value

Published online by Cambridge University Press:  26 January 2015

Sarah Dorsey  and
Michael Boland
Sarah Dorsey
Affiliation:
Cameron University, Lawton, OK
Michael Boland
Affiliation:
Kansas State University, Manhattan, KS
Get access Rights & Permissions [Opens in a new window]

Abstract

The objective of this study is to analyze whether a discount or premium exists for coordination strategies in food processing, wholesale grocery, retail supermarkets, and restaurants. Significant premiums are found for food processor and restaurant vertical integration or diversification strategies. Significant discounts are found for food wholesaler and retail supermarket integration or diversification strategies. Food processors are found to be integrating toward retail supermarkets during this time period.

Keywords

agribusinessfoodinstitutional economicsintegrationQ13L66L14
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 41 , Issue 3 , December 2009 , pp. 585 - 598
Copyright
Copyright © Southern Agricultural Economics Association 2009

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Anderson, R.C., and Reeb., D.M. “Founding-Family Ownership and Firm Performance: Evidence from the S&P 500.” The Journal of Finance 58(2003): 1301–28.CrossRefGoogle Scholar
Barkema, A., Drabenstott, M., and Welch., K. “The Quiet Revolution in the U.S. Food Market.” Federal Reserve Bank of Kansas City Economic Review. May/June 1991.Google Scholar
Berger, P.G., and Ofek., E. “Diversification's Effect on Firm Value.” Journal of Financial Economics 37(1995):39–65.CrossRefGoogle Scholar
Boland, M.A., Golden, B., and Tsoodle., L. “Agency Problems in the Food Processing Industry.” Journal of Agricultural and Applied Economics 402(2008):623–34.CrossRefGoogle Scholar
Boyd, S., Boland, M.A., Dhuyvetter, K., and Barton., D. “The Persistence of Profitability in Local Farm Supply and Grain Marketing Cooperatives.” Journal of Agricultural and Applied Economics 59(2007):201–10.CrossRefGoogle Scholar
Campa, J.M., and Kedia., S. “Explaining the Diversification Discount.” The Journal of Finance 57(2002): 1731–62.CrossRefGoogle Scholar
Coase, R.H. “The Nature of the Firm.” Economica 4(1937):386–405.CrossRefGoogle Scholar
Ding, J.Y., Caswell, J.A., and Zhou., F. “Related-ness and Performance: A Reexamination of the Diversification-Performance Link.” Journal of Food Distribution Research 28(1987):66–73.Google Scholar
Dorsey, S.G. “Measuring the Impact of Integration and Diversification on Firm Value in the Food Industry.” Ph.D. dissertation. Kansas State University, November 2006.Google Scholar
Frank, S.D., and Henderson., D.R. “Transaction Costs as Determinants of Vertical Coordination in the U.S. Food Industries.” American Journal of Agricultural Economics 74(1992):941–50.CrossRefGoogle Scholar
Grossman, S.J., and Hart., O.D. “The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration.” The Journal of Political Economy 94(1986):691–719.CrossRefGoogle Scholar
Halvorsen, R., and Palmquist., R. “The Interpretation of Dummy Variables in Semilogarithmic Equations.” The American Economic Review 70(1980):474–75.Google Scholar
Heckman, J.J. “Sample Selection Bias as a Specification Error.” Econometrica 47(1979):153–61.CrossRefGoogle Scholar
Hennessy, D.A. “Information Asymmetry as a Reason for Food Industry Vertical Integration.” American Journal of Agricultural Economics 78(1996): 1034–43.CrossRefGoogle Scholar
Jensen, M.C., and Meckling., W.H. “Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure.” Journal of Financial Economics 3(1976):305–60.CrossRefGoogle Scholar
Katchova, A.L. “The Farm Diversification Discount.” American Journal of Agricultural Economics 87(2005):984–94.CrossRefGoogle Scholar
Kennedy, P.E. “Estimation with Correctly Interpreted Dummy Variables in Semilogarithmic Equations.” The American Economic Review 71(1981):801.Google Scholar
Laeven, L., and Levine., R. “Is There a Diversification Discount in Financial Conglomerates?” Journal of Financial Economics 85,2(2007):331–67.CrossRefGoogle Scholar
Lang, L.H.P., and Stulz., R.M. “Tobin's q, Corporate Diversification, and Firm Performance.” The Journal of Political Economy 102(1994): 1248–80.Google Scholar
Martinez, S.W. “Vertical Coordination in the Pork and Broiler Industries: Implications for Pork and Chicken Products.” AER No. 777. U.S. Department of Agriculture/Economic Research Service, Washington, D.C., 1999.Google Scholar
Schumacher, S., and Boland., M.A. “Persistence in Profitability in Food and Agribusiness Firms.” American Journal of Agricultural Economics 87(2005): 103–15.CrossRefGoogle Scholar
Servaes, H. “The Value of Diversification During the Conglomerate Merger Wave.” The Journal of Finance 51 (1996): 1201–25.CrossRefGoogle Scholar
Sexton, R.J. “Industrialization and Consolidation in the U.S. Food Sector: Implications for Competition and Welfare.” American Journal of Agricultural Economics 82(2000): 1087-104.CrossRefGoogle Scholar
Sykuta, M., and James., H.S. “Organizational Economics Research in the U.S. Agricultural Sector and the Contracting and Organizations Research Institute.” American Journal of Agricultural Economics 86(2004):756–61.CrossRefGoogle Scholar
Taylor, M., Brester, G., and Boland., M.A. “General Mills and its Hard White Wheat Contracting Program.” Review of Agricultural Economics 27(2005): 117–29.CrossRefGoogle Scholar
Young, L.M., and Hobbs., J.E. “Vertical Linkages in Agri-Food Supply Chains: Changing Roles for Producers, Commodity Groups, and Government Policy.” Review of Agricultural Economics 24(2002):428–41.CrossRefGoogle Scholar