Governance and Performance in the U.S. Agri-Food Industry: A Comparative Study of Firms and Cooperatives

Jasper Grashuis and Michael Cook

No 235676, 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts from Agricultural and Applied Economics Association

Abstract: This paper presents a unique descriptive and empirical study of governance and performance in the U.S. agri-food industry with specific emphasis on the boards of directors of firms and cooperatives. Per the summary statistics, the average firm has more assets, more sales, and more profits, yet efficiency and profitability ratios indicate the average cooperative is superior. Using seven board and management characteristics, a three-stage least squares model is specified for two samples of 128 firms and 456 cooperatives in order to address the hypothesized endogenous nature of the governance-performance relationship. For the cooperative sample, the impact of board size on performance is estimated to be negative, while female directorship, director independence, and director ownership have a positive and significant causal relationship to various proxies of performance. Overall, in relation to financial performance, governance as proxied by board and management characteristics is concluded to be more impactful for the cooperative sample, which implies a significant difference between corporate and cooperative governance.

Keywords: Agribusiness; Industrial Organization (search for similar items in EconPapers)
Pages: 55
Date: 2016
New Economics Papers: this item is included in nep-agr, nep-bec, nep-cse, nep-eff, nep-hme and nep-mkt
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea16:235676

DOI: 10.22004/ag.econ.235676

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