Dynamic and contemporaneous causality in a supply chain: an application of the US beef industry
AbstractCausal relationships are used to investigate information flows and directions of control in a decentralized multi-echelon supply chain where no central authority has system level control over optimizing decisions. We use secondary time-series data representing the US beef industry to investigate dynamic and contemporaneous causality based on out-of-sample Granger causality and Direct Acyclic Graphs (DAGs). Results indicate: (i) the US beef supply chain experienced a significant structural change in late 1996 and early 1997 that may be attributed to a weather induced production shock and an apparent turnaround of the cattle cycle; (ii) contemporaneous causalities appear to be stronger and dynamic causalities appear to be weaker after the structural change, suggesting faster and more effective information transmission along the supply chain after the structural change; (iii) contemporaneous information appears to flow from upstream to downstream tiers in the supply chain before the structural break, which reverses after the structural break, suggesting a shift in control from upstream to downstream firms; and (iv) co-use of spot market and contracts to procure strategic inputs by processors appears to allow processors some control of spot price through contract purchases in the post-break period. Our approach could be readily used to investigate other multi-echelon systems.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 43 (2011)
Issue (Month): 30 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RAEC20
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Ji, In Bae & Chung, Chanjin, 2012. "Causality Between Captive Supplies and Cash Market Prices in the U.S. Cattle Procurement Market," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 41(3), December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.