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Financial Structure, Production and Productivity Growth in U.S. Food Manufacturing Industry

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  • Hossain, Ferdaus
  • Jain, Ruchi

Abstract

This paper examines the effects of financial decsion on production, input demands, profitability, and productivityis in U.S. food manufacturing industry. Empirical results shows that output supply, variable input demands, profitability and productivity are affected by agency costs of debt and signaling benefits of dividend payments. Positive contribution of signalling benefits of dividend payments was more than offset by the negative effects of agency cost of debt in TFP growth.

Suggested Citation

  • Hossain, Ferdaus & Jain, Ruchi, 2001. "Financial Structure, Production and Productivity Growth in U.S. Food Manufacturing Industry," 2001 Annual meeting, August 5-8, Chicago, IL 20756, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea01:20756
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    File URL: http://ageconsearch.umn.edu/record/20756/files/sp01ho05.pdf
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    References listed on IDEAS

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    2. Kim, Moshe & Maksimovic, Vojislav, 1990. "Technology, debt and the exploitation of growth options," Journal of Banking & Finance, Elsevier, vol. 14(6), pages 1113-1131, December.
    3. Catherine J. Morrison & Donald Siegel, 1997. "External Capital Factors And Increasing Returns In U.S. Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 647-654, November.
    4. Jeffrey I. Bernstein & M. Ishaq Nadiri, 1988. "Corporate Taxes and Incentives and the Structure of Production: A Selected Survey," NBER Working Papers 2579, National Bureau of Economic Research, Inc.
    5. Leland, Hayne E & Pyle, David H, 1977. "Informational Asymmetries, Financial Structure, and Financial Intermediation," Journal of Finance, American Finance Association, vol. 32(2), pages 371-387, May.
    6. Berndt, Ernst R. & Morrison, Catherine J., 1995. "High-tech capital formation and economic performance in U.S. manufacturing industries An exploratory analysis," Journal of Econometrics, Elsevier, vol. 65(1), pages 9-43, January.
    7. Catherine J. Morrison Paul, 1999. "Scale Effects and Mark-ups in the US Food and Fibre Industries: Capital Investment and Import Penetration Impacts," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(1), pages 64-82.
    8. James M. Poterba & Lawrence H. Summers, 1984. "The Economic Effects of Dividend Taxation," Working papers 343, Massachusetts Institute of Technology (MIT), Department of Economics.
    9. Greenwald, Bruce C. & Kohn, Meir & Stiglitz, Joseph E., 1990. "Financial market imperfections and productivity growth," Journal of Economic Behavior & Organization, Elsevier, vol. 13(3), pages 321-345, June.
    10. Pindyck, Robert S & Rotemberg, Julio J, 1983. "Dynamic Factor Demands and the Effects of Energy Price Shocks," American Economic Review, American Economic Association, vol. 73(5), pages 1066-1079, December.
    11. B. Douglas Berhheim, 1991. "Tax Policy and the Dividend Puzzle," RAND Journal of Economics, The RAND Corporation, vol. 22(4), pages 455-476, Winter.
    12. Bernstein, J.I. & Nadiri, M.I., 1993. "Production, Financial Structure and Productivity Growth in U.S. Manufacturing," Working Papers 93-10, C.V. Starr Center for Applied Economics, New York University.
    13. Morrison, C. J. & Berndt, E. R., 1981. "Short-run labor productivity in a dynamic model," Journal of Econometrics, Elsevier, vol. 16(3), pages 339-365, August.
    14. Alan J. Auerbach, 1979. "Wealth Maximization and the Cost of Capital," The Quarterly Journal of Economics, Oxford University Press, vol. 93(3), pages 433-446.
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    Cited by:

    1. Hailu, Getu & Jeffrey, Scott R. & Goddard, Ellen W. & Ng, Desmond W., 2004. "Incentive Incompatibility In Co-Operative Agribusiness Firms In Canada: Does Supply Management Matter?," Journal of Food Distribution Research, Food Distribution Research Society, vol. 0(Number 1), pages 1-2, March.

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    Keywords

    Agribusiness;

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