INVESTMENT IN PUBLICLY TRADED FIRMS AS A VERTICAL INTEGRATION AND A RISK DIVERSIFICATION STRATEGY

Joshua Detre, Allan Gray () and Christine Wilson

No 19748, 2002 Annual meeting, July 28-31, Long Beach, CA from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

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.

Keywords: Agribusiness; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 18
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea02:19748

DOI: 10.22004/ag.econ.19748

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