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Determinants of Return on Equity in U.S. Local Farm Supply and Grain Marketing Cooperatives

Author

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  • Boyd, Scott
  • Boland, Michael A.
  • Dhuyvetter, Kevin C.
  • Barton, David G.

Abstract

Farm supply cooperatives are an important component of the retail agribusiness industry in the United States. The objective of this research is to identify financial variables that are determinants of return on equity in these cooperatives. Firm effects are important and their effect is the result of managerial decision making and director policy. The estimated coefficient on asset size was not statistically significant, suggesting that return on equity is invariant to size over this period.

Suggested Citation

  • Boyd, Scott & Boland, Michael A. & Dhuyvetter, Kevin C. & Barton, David G., 2007. "Determinants of Return on Equity in U.S. Local Farm Supply and Grain Marketing Cooperatives," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 39(1), pages 1-10, April.
    • Handle: RePEc:ags:joaaec:6608
    DOI: 10.22004/ag.econ.6608
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    Cited by:

    1. Marco Fazzini & Antonella Russo, 2014. "Profitability in the Italian Wine Sector: An Empirical Analysis of Cooperatives and Investor-Owned Firms," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(3), pages 130-137, July.
    2. Dariusz Kusz & Iwona Bąk & Beata Szczecińska & Ludwik Wicki & Bożena Kusz, 2022. "Determinants of Return-on-Equity (ROE) of Biogas Plants Operating in Poland," Energies, MDPI, vol. 16(1), pages 1-22, December.
    3. Miranda, Mario J. & Chen, Meng-Fen, 2021. "Leverage, Liquidity and Agricultural Cooperative Profitability," 2021 Annual Meeting, August 1-3, Austin, Texas 314012, Agricultural and Applied Economics Association.
    4. Michael A. Boland & Brian C. Briggeman & Keri Jacobs & Phil Kenkel & Gregory McKee & John L. Park, 2021. "Research Priorities for Agricultural Cooperatives and their Farmer‐Members," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(2), pages 573-585, June.
    5. Pokharel, Krishna & Archer, David W. & Featherstone, Allen M., 2018. "The Impact of Size and Specialization on the Financial Performance of Agricultural Cooperatives," 2018 Annual Meeting, August 5-7, Washington, D.C. 274109, Agricultural and Applied Economics Association.
    6. Salazar Idana & Galve Górriz Carmen, 2011. "Determinants of the Differences in the Downstream Vertical Integration and Efficiency Implications in Agricultural Cooperatives," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-26, February.
    7. Sebhatu, Kifle T. & Gezahegn, Tafesse W. & Berhanu, Tekeste & Maertens, Miet & Passel, Steven Van & D'Haese, Marijke, 2021. "Exploring variability across cooperatives: economic performance of agricultural cooperatives in northern Ethiopia," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 24(3), March.
    8. Theo Benos & Nikos Kalogeras & Martin Wetzels & Ko De Ruyter & Joost M. E. Pennings, 2018. "Harnessing a ‘Currency Matrix’ for Performance Measurement in Cooperatives: A Multi-Phased Study," Sustainability, MDPI, vol. 10(12), pages 1-38, December.
    9. Daniel Anarfi & Kofi Ampadu Boateng & Kwabena Adu Ababio, 2016. "Determinants of Return on Equity for a Sustainable Growth of the Manufacturing Industry in the Czech Republic," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 2(1), pages 43-52.
    10. Bereznicka, Joanna, 2018. "Sources of return on equity in economically diversified agriculture of the European Union countries," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 276626, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    11. Boland, Michael A. & Golden, Bill B. & Tsoodle, Leah J., 2008. "Agency Theory Issues in the Food Processing Industry," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(2), pages 623-634, August.
    12. Anchalee Nuansri & Avishek Datta & Takuji W. Tsusaka & Farhad Zulfiqar, 2024. "Factors influencing the profit and choice of agribusiness for agricultural cooperatives in Thailand," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(1), pages 751-772, January.
    13. McKee, Gregory J. & Shaik, Saleem & Boland, Michael A., 2009. "Role of Financial Variables in Explaining the Profitability of North Dakota Farm Supply and Grain Marketing Cooperatives," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 37(2), pages 1-12.
    14. Thomas Sporleder & Michael Boland, 2013. "Seven Fundamental Economic Characteristics Exclusivity of Agrifood Supply Chains (part 2)," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(4), pages 174-180.
    15. Russell, Levi A. & Briggeman, Brian C. & Featherstone, Allen M., 2013. "Debt and Input Misallocation in Farm Supply and Marketing Cooperatives: A DEA Approach," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150445, Agricultural and Applied Economics Association.
    16. Theodoros Skevas & Jasper Grashuis, 2023. "Evaluating dynamic productivity change of US farm supply cooperatives," Agribusiness, John Wiley & Sons, Ltd., vol. 39(4), pages 1238-1253, October.
    17. Kuhle Prudence Mnisi & Abdul Latif Alhassan, 2021. "Financial structure and cooperative efficiency: A pecking‐order evidence from sugarcane farmers in Eswatini," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 92(2), pages 261-281, June.
    18. Mattia Iotti & Giuseppe Bonazzi, 2023. "Financial Sustainability in Agri-Food Companies: The Case of Members of the PDO Parma Ham Consortium," Sustainability, MDPI, vol. 15(5), pages 1-31, February.
    19. Ariyaratne, Chatura B. & Briggeman, Brian C., 2015. "Risk, Profitability, and Efficiency in Agricultural Cooperatives under Allocated and Unallocated Equity," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205418, Agricultural and Applied Economics Association.
    20. Giuseppe Bonazzi & Paolo Camanzi & Giovanni Ferri & Elisa Manghi & Mattia Iotti, 2021. "Economic Sustainability of Pig Slaughtering Firms in the Production Chain of Denomination of Origin Hams in Italy," Sustainability, MDPI, vol. 13(14), pages 1-18, July.

    More about this item

    Keywords

    Agribusiness; Marketing;

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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