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Article

Ani L. Katchova and Sierra J. Enlow

Agribusinesses represent a fundamental link in connecting farmers with retailers and consumers, yet little research has been done to examine the historical financial…

Abstract

Purpose

Agribusinesses represent a fundamental link in connecting farmers with retailers and consumers, yet little research has been done to examine the historical financial performance of these food processing firms. This paper aims to address this issue.

Design/methodology/approach

The authors' research examines how publicly‐traded agribusinesses perform financially compared to all firms over the period from 1961 to 2011. The authors utilize several indicators of company success, including financial ratios and balance sheet/income statement items, to compare agribusiness firms to all firms in the market. The authors perform the analysis over time and also for companies with low, median, and high performance. They also perform Du Pont analysis to compare return on equity components between agribusinesses and all firms.

Findings

The authors find that agribusinesses outperform at the median the sample of all firms in terms of financial ratios related to profitability, liquidity, and market ratios, but have slightly lower liquidity and debt ratios. The Du Pont analysis shows that the higher return on equity for agribusinesses is mostly due to higher asset turnover ratios, indicating higher operating efficiency of agribusinesses. The strong financial performance of food manufacturing agribusinesses makes them valuable companies in an investment portfolio.

Originality/value

This study provides a basic overview of financial ratios used to examine the financial performance of publicly‐traded agribusinesses. The authors' findings show that agribusinesses outperform all firms in terms of key financial indicators.

Details

Agricultural Finance Review, vol. 73 no. 1
Type: Research Article
ISSN: 0002-1466

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Article

Amarjit Gill, Harvinder Singh Mand, John D. Obradovich and Neil Mathur

The purpose of this paper is to examine the impact of financial support from non-resident family members (FSNRFM) on the financial performance of newer agribusiness firms in India.

Abstract

Purpose

The purpose of this paper is to examine the impact of financial support from non-resident family members (FSNRFM) on the financial performance of newer agribusiness firms in India.

Design/methodology/approach

Owners of newer agribusiness firms (five years old or less) from India were surveyed regarding the perceived impact of FSNRFM on the financial performance of newer agribusiness firms.

Findings

The results show that newer agribusiness firms with FSNRFM perform better than those without FSNRFM; and build higher levels of internal financing sources relative to the newer agribusiness firms without FSNRFM, which, in turn, improves their performance.

Research limitations/implications

This is a co-relational study that investigated the association between FSNRFM and financial performance of newer agribusiness firms. There is not necessarily a causal relationship between the two. The findings of this study may only be generalized to firms similar to those that were included in this research.

Originality/value

The study enriches the literature concerning newer agribusiness firms and the factors that improve their financial performance. The results of this study can be of great significance for owners of these firms, financial managers, farm management consultants, and other stakeholders to understand the impact of FSNRFM on financial performance of newer agribusiness firms.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. 8 no. 2
Type: Research Article
ISSN: 2044-0839

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Article

Michael Kwamega, Dongmei Li and Eugene Abrokwah

The purpose of this paper is to investigate the mediating effect of information sharing (IS) on the link between supply chain integration (SCI) practices (internal…

Abstract

Purpose

The purpose of this paper is to investigate the mediating effect of information sharing (IS) on the link between supply chain integration (SCI) practices (internal, customer and supplier) and internal process performance (IPP) by using selected agribusiness firms from an emerging economy, Ghana.

Design/methodology/approach

To determine the effect of IS on the nexus between SCI practices and IPP, a research framework was developed and tested using data amassed from 156 agribusiness firms for the study. The data set was assessed and hypotheses were tested using structural equation modelling.

Findings

The outcomes revealed that both INI and CI positively and significantly influenced IS. However, the results disclosed that SI has no significant positive effect on IS among the Ghanaian agribusiness firms. The findings of the study further discovered that IS fully mediates the relationship between INI, CI and IPP, whereas SI has a direct interaction with IPP.

Originality/value

This study contributes to the existing supply chain management research by empirically authenticating IS as the mediator between SCI practices and IPP. From the viewpoint of a developing economy, this paper identifies the significant connection that exists between SCI practices, IS and IPP. The outcomes recommend that IS is a core driving facilitator to reinforce the correlation between SCI practices and IPP.

Details

Business Process Management Journal, vol. 25 no. 7
Type: Research Article
ISSN: 1463-7154

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Article

Mark Steven Johnson and Tolani Lawson

The purpose of this paper is to determine the impact of the passage and signing of P.L. 111-353, the Food Safety Modernization Act (FSMA), on the market value of…

Abstract

Purpose

The purpose of this paper is to determine the impact of the passage and signing of P.L. 111-353, the Food Safety Modernization Act (FSMA), on the market value of agribusiness firms.

Design/methodology/approach

The authors conduct an event study of the shareholder value effects of FSMA. The short-window analyses estimate the three-, five-, and seven-day market responses to three key event dates: passage by the House, passage by the Senate, and the signing of FSMA by President Obama. The long-window analyses examine a time period that encompasses the three informational events, as well as the 30 months after the signing of FSMA. To control for the effects of market-wide fluctuations, the authors use two alternative models of the returns generating process to calculate abnormal returns, the Capital Asset Pricing Model (CAPM) and the Fama-French three-factor model.

Findings

The short-window analyses show no evidence of a significant reaction to the passage of FSMA by the House or the Senate, but evidence of a significant negative reaction to the signing of FSMA by President Obama. The long window results which span the of passage by House, passage by the Senate and signing by the President indicate a decline in the average market value of agribusiness firms on the order of – 10 percent over the period. Additionally, the authors find some evidence that this effect is not evenly spread out across different types of agribusiness firms (wholesale, grocery, and processing).

Originality/value

The study is the first to examine the impact of P.L.111-353 on the market value of agribusiness firms.

Details

Agricultural Finance Review, vol. 76 no. 2
Type: Research Article
ISSN: 0002-1466

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Article

Brandon Schaufele and David Sparling

The purpose of this paper is to investigate the relationships between regulatory changes, returns on equity and stock market valuations for Canadian food and non‐food…

Abstract

Purpose

The purpose of this paper is to investigate the relationships between regulatory changes, returns on equity and stock market valuations for Canadian food and non‐food agribusinesses.

Design/methodology/approach

Two empirical approaches are employed. First, an event study is used to evaluate the impact of official regulatory announcements on the stock market valuations of selected Canadian agribusinesses. Next, an approach introduced by Mishra et al. using the Du Pont expansion is applied to investigate the effect of regulations on firms' accounting profits. Data on Canadian food and non‐food agribusinesses are collected from Bloomberg, Thompson One Banker and SEDAR.

Findings

The event study demonstrates that official regulatory announcement dates do not correspond with abnormal stock market returns for Canadian firms, while the Du Pont model yields mixed evidence with respect to their accounting profits.

Research limitations/implications

This paper only considers publicly traded companies. As a result, survivorship bias may exist. Future research should include privately held and cooperative firms.

Social implications

Food regulations can influence firm profits and shareholder wealth, so understanding how government actions influence agribusiness is important when considering the total costs of current and future food policy.

Originality/value

The interaction between policy and the financial performance of Canada's publicly traded agribusinesses is an under‐researched area and no studies have examined Canadian data. The results of this study are valuable to both policy makers and researchers.

Details

Agricultural Finance Review, vol. 71 no. 2
Type: Research Article
ISSN: 0002-1466

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Article

R. Wes Harrison and P. Lynn Kennedy

The importance of high value products as a component of United States agricultural output has increased significantly in recent years. Moreover, high value products as a…

Abstract

The importance of high value products as a component of United States agricultural output has increased significantly in recent years. Moreover, high value products as a percentage of U.S. agricultural exports have also risen (Burfisher and Missiaen, 1990). Given these trends, it is not surprising that agribusiness competitiveness has become a topic of much discussion in both the popular press and in academic literature. Its importance is also evidenced by initiatives set forth by the Western Regional Coordinating Committee on Agribusiness Research Emphasizing Competitiveness and the International Agricultural Trade Research Consortium symposium Competitiveness in International Food Markets. More recently, the National Association of State Universities and Land Grant Colleges' Board on Agriculture endorsed the Agricultural Competitiveness Initiative (ACI). This initiative calls on land‐grant universities to consider new paradigms for conducting research, extension, and teaching on the issue of U.S. agricultural competitiveness.

Details

Competitiveness Review: An International Business Journal, vol. 7 no. 1
Type: Research Article
ISSN: 1059-5422

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Article

Kathleen Hastings and Chad Perry

Investigates whether success factors for Australian services firms that export to Asia are consistent with the theory of relationship marketing, and demonstrates the power…

Abstract

Investigates whether success factors for Australian services firms that export to Asia are consistent with the theory of relationship marketing, and demonstrates the power of the in‐depth interview methodology for exploring marketing theory. Relationship marketing theory suggests that services firms should adopt a relationship marketing approach while goods firms might use a transactional approach. To investigate this theory, a series of in‐depth interviews were conducted in firms marketing agribusiness products to Asia. We found that growth in the agribusiness services sector could be attributed to their strategy of “pairing” with Australian commodity exporters rather than to entering the market directly. Contrary to expectations, we found that Australian goods firms consider building relationships with Asian distributors and customers crucial to initiating and maintaining an export strategy. Furthermore, Australian agribusiness services firms do not seek to enter the market on their own but build relationships with Australian firms as a means of accessing the Asian market. The results demonstrate the power of qualitative methods for uncovering results that confirm or disconfirm existing theory.

Details

Qualitative Market Research: An International Journal, vol. 3 no. 4
Type: Research Article
ISSN: 1352-2752

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Article

Steven Haggblade

The purpose of this paper is to look forward to explore the links between projected rapid rates of agribusiness expansion and Africa's economic growth, equity and spatial…

Abstract

Purpose

The purpose of this paper is to look forward to explore the links between projected rapid rates of agribusiness expansion and Africa's economic growth, equity and spatial development.

Design/methodology/approach

The paper draws inferences from 30 years of agribusiness value chain research in Africa.

Findings

Africa's agribusinesses stand poised for exceptionally rapid growth over the coming 40 years. Because of strong interdependencies between agribusiness and agriculture, productivity growth in agribusiness systems will critically affect Africa's overall economic growth rate, its spatial development patterns and progress toward poverty reduction. But the necessary efficiency gains in agribusiness performance will not appear automatically. They will require substantial private investments, a competitive private sector and heightened public attention in areas where governments have historically proven weak: promoting regional trade, improving town and regional planning, financing scientific research, funding higher education and building commercially viable rural financial systems.

Research limitations/implications

Researchers can help by assembling empirical evidence in these topic areas and by examining value chain models that stimulate private sector investment, accelerate efficiency gains and facilitate access and egress by the poor.

Originality/value

Drawing on 30 years of value chain research in Africa, the paper examines links between agribusiness trajectories and economic growth, equity and spatial development.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. 1 no. 1
Type: Research Article
ISSN: 2044-0839

Keywords

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Article

Walter Odongo, Manoj Dora, Adrienn Molnár, Duncan Ongeng and Xavier Gellynck

A good supply chain relationship quality (RQ) is a crucial precursor for any stable exchange relationship which ensures relationship continuity. Although empirical…

Abstract

Purpose

A good supply chain relationship quality (RQ) is a crucial precursor for any stable exchange relationship which ensures relationship continuity. Although empirical research suggests that strengthening RQ improves supply chain performance (SCP), most studies have focused on dyadic business relationships. To fully understand the relational behaviour of a firm embedded in a supply chain, we need to look beyond the dyad into triads. The purpose of this paper is to investigate how SCP is influenced by RQ in a triadic agribusiness supply chain.

Design/methodology/approach

Evidence is drawn from a quantitative survey of 150 agribusiness firms in the maize supply chain in Uganda. Data were collected in triadic context from 50 direct supply chains each composing of a supplier, focal firm and customer. Multi-group structural equations modelling (SEM) was used to assess the differences in perception on the influence of RQ on SCP amongst the supply chain members.

Findings

Results provides empirical support for the positive influence of RQ on SCP. SEM reveals differences in perception between the upstream and downstream and amongst the supply chains members. While focal firms considered conflict, coercive power, commitment and trust to be important; suppliers considered trust, dependency and non-coercive power; and customers considered trust, dependency and coercive power to be important RQ factors affecting SCP.

Practical implications

For agribusiness managers to enhance business performance there is need to cultivate strong and mutual relationship with supply chain members. It is also important to know how to handle conflicts and use of power so as to realise the benefits of supply chain relationships.

Originality/value

The paper is novel in that it assesses SCP in a triadic context in an agribusiness sector from a developing country context. The authors used novel approaches including analysis of a triad, and multiple groups SEM to assess perceptions of each supply chain member’s.

Details

British Food Journal, vol. 118 no. 7
Type: Research Article
ISSN: 0007-070X

Keywords

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Article

Ivana Blažková and Ondřej Dvouletý

The purpose of this paper is to analyse to what extent industry, year and firm effects influence the profitability of the firms operating in the Czech food processing…

Abstract

Purpose

The purpose of this paper is to analyse to what extent industry, year and firm effects influence the profitability of the firms operating in the Czech food processing industry. The authors’ interest is also to investigate whether the profitability of a few firms (regarded as outliers) is able to influence the relative importance of year, firm and industry effects and to find out the relative importance of these effects for the majority of the firms.

Design/methodology/approach

The effects are tested using the fixed effects regression models on the unbalanced panel dataset which consists of 10,509 observations for 1,804 enterprises across the ten food sectors over the period 2003-2014. To ensure the consistency of the results, the authors use the three different measures of profitability: return on assets, return on equity and price-cost margin.

Findings

The results suggest that, on average, industry and year effects have little impact on firm profitability variance, and firm-specific effects dominate when seeking to explain firm profitability variance. To the best of the authors’ knowledge, the obtained results are supported by most of the previously published studies.

Practical implications

Based on the findings, the authors encourage future researchers to add, as explanatory factors, governmental policies and to test their impact on firm profitability.

Originality/value

The study helps to fill in the research gap in the field of agribusiness, as, to the best of the authors’ knowledge, no study has been conducted yet in the Czech agribusiness environment. Considering the approach distinguishing the “average” and dominant firms in the sectors, they aim at a methodological contribution to this field of research dealing with firm profitability variation.

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