登入選單

返回Google圖書搜尋

Supply Uncertainty and Foreign Direct Investment in Agri-food Industry

KonéMankan M. KonéCarl GaignéLota D. Tamini

出版	Center for Research on the Economics of the Environment, Agri-food, Transports and Energy, 2017
URL	http://books.google.com.hk/books?id=e7-SwwEACAAJ&hl=&source=gbs_api

註釋

We investigate whether and to what extent agricultural uncertainty drives the location of capital in the food processing industry. We show that when a risk-neutral food company has the possibility of exercising market power as both seller and buyer, the impact of agricultural uncertainty on the decision of producing abroad depends on whether the multinational makes the pricing/production decision before or after uncertainty is revealed. An econometric study is then needed to identify the mechanisms at work. The theoretical implications are tested by using a gravity model on European countries' and the United States' outward FDI stock, detailed by destination country in the agri-food industry. Overall, our results suggest that a higher agricultural volatility in the home country triggers investments abroad and that a host country exhibiting low agricultural uncertainty attracts relatively more foreign capital. Moreover, international differences in agricultural uncertainty generate incentives for vertical disintegration by food companies, especially when trade costs are sufficiently low.