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Persistence of Profitability in Family-Owned Food Businesses

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  • Boland, Michael A.
  • Pendell, Dustin L.

Abstract

We examine firm profitability in the food economy and determine the source of variance of firm profitability in family-owned and non-family-owned food processing firms. The results indicate firm effects dominate in explaining the variance in the business-segment performance in the food economy. More specifically, we find family-owned firms compared to non-family-owned firms have a higher percentage of total variance in the business-segment performance explained by yearly effects, industry effects, and firm effects for both the random-effects and fixed-effects models.

Suggested Citation

  • Boland, Michael A. & Pendell, Dustin L., 2005. "Persistence of Profitability in Family-Owned Food Businesses," 2005 Annual meeting, July 24-27, Providence, RI 19216, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea05:19216
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    File URL: http://purl.umn.edu/19216
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    References listed on IDEAS

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    1. Porter, Michael E, 1974. "Consumer Behavior, Retailer Power and Market Performance in Consumer Goods Industries," The Review of Economics and Statistics, MIT Press, vol. 56(4), pages 419-436, November.
    2. Stein, Jeremy C, 1988. "Takeover Threats and Managerial Myopia," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 61-80, February.
    3. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
    4. Harvey James, 1999. "Owner as Manager, Extended Horizons and the Family Firm," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 6(1), pages 41-55.
    5. Anita M. McGahan & Michael E. Porter, 2002. "What Do We Know About Variance in Accounting Profitability?," Management Science, INFORMS, vol. 48(7), pages 834-851, July.
    6. Demsetz, Harold, 1983. "The Structure of Ownership and the Theory of the Firm," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 375-390, June.
    7. Gabriel Hawawini & Venkata Subban Subramanian & Paul Verdin, 2003. "Is performance driven by industry- or firm-specific factors? A new look at the evidence," ULB Institutional Repository 2013/14188, ULB -- Universite Libre de Bruxelles.
    8. Sara Schumacher & Michael Boland, 2005. "The effects of industry and firm resources on profitability in the food economy," Agribusiness, John Wiley & Sons, Ltd., vol. 21(1), pages 97-108.
    9. Demsetz, Harold & Lehn, Kenneth, 1985. "The Structure of Corporate Ownership: Causes and Consequences," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1155-1177, December.
    10. Randall K. Morck, 2000. "Concentrated Corporate Ownership," NBER Books, National Bureau of Economic Research, Inc, number morc00-1, January.
    11. Radice, H K, 1971. "Control Type, Profitability and Growth in Large Firms: an Empirical Study," Economic Journal, Royal Economic Society, vol. 81(323), pages 547-562, September.
    12. Schmalensee, Richard, 1985. "Do Markets Differ Much?," American Economic Review, American Economic Association, vol. 75(3), pages 341-351, June.
    13. Michael A. Boland, 2005. "The Persistence of Profitability among Firms in the Food Economy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 103-115.
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    Cited by:

    1. Mutonyi, Sarah & Gyau, Amos, 2014. "Measuring performance of small and medium scale agrifood firms in developing countries: Gap between Theory and Practice," 140th Seminar, December 13-15, 2013, Perugia, Italy 163339, European Association of Agricultural Economists.

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    Keywords

    Agribusiness;

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