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Investment In Publicly Traded Firms As A Vertical Integration And A Risk Diversification Strategy

Author

Listed:
  • Detre, Joshua D.
  • Gray, Allan W.
  • Wilson, Christine A.

Abstract

This research investigates the potential of investments in publicly traded value adding firms in the meat industry as a strategy for livestock producers to diversify risk and capture value-added profits, while allowing the producer to maintain management authority and minimize costs. The research determines the optimal portfolio of investments in up to 66 publicly traded value-added companies. The results indicate tat a portfolio consisting of livestock production and publicly traded value-added companies provides better returns at a lower risk than either a 100 percent investment in livestock production or a combination of livestock production and the S&P 500.

Suggested Citation

  • Detre, Joshua D. & Gray, Allan W. & Wilson, Christine A., 2002. "Investment In Publicly Traded Firms As A Vertical Integration And A Risk Diversification Strategy," 2002 Annual meeting, July 28-31, Long Beach, CA 19748, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea02:19748
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    File URL: http://purl.umn.edu/19748
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    Keywords

    Agribusiness; Risk and Uncertainty;

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