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Risk and the Farm Firm: A Corporate Finance View

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  • Johnson, R.W.M.

Abstract

Recent applications of risk analysis in corporate finance to farm firm decision making are reviewed in this paper. The inclusion of risk parameters modifies some of the traditional agricultural economics views on investment, financing and the portfolio choice problem. A clearer view emerges of farm investment behaviour. Further topics for research are identified. In the author's view, the corporate finance analysis provides a more coherent set of paradigms that explain actual farm investment and financing decision making m a more satisfactory way than previously available.

Suggested Citation

  • Johnson, R.W.M., 1992. "Risk and the Farm Firm: A Corporate Finance View," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 60(01), pages 1-13, April.
    • Handle: RePEc:ags:remaae:12498
    DOI: 10.22004/ag.econ.12498
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    File URL: https://ageconsearch.umn.edu/record/12498/files/60010009.pdf
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    References listed on IDEAS

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    1. William F. Sharpe, 1964. "Capital Asset Prices: A Theory Of Market Equilibrium Under Conditions Of Risk," Journal of Finance, American Finance Association, vol. 19(3), pages 425-442, September.
    2. Bardsley, Peter & Cashin, Paul, 1990. "Underwriting Assistance To The Australian Wheat Industry - An Application Of Option Pricing Theory," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 34(3), pages 1-11, December.
    3. Robert A. Collins & Peter J. Barry, 1986. "Risk Analysis with Single-Index Portfolio Models: An Application to Farm Planning," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(1), pages 152-161.
    4. Louise M. Arthur & Colin A. Carter & Fay Abizadeh, 1988. "Arbitrage Pricing, Capital Asset Pricing, and Agricultural Assets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(2), pages 359-365.
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    Cited by:

    1. Beal, Diana J., 1996. "Emerging Issues in Risk Management in Farm Firms," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 64(03), pages 1-12, December.
    2. Batterham, Robert L. & Drynan, Ross G. & Oarke, D.K. & Carter, P.H., 1993. "A Note Comparing Single-Index Models and Quadratic Programming Models for Farm Planning Under Risk," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 61(03), pages 1-14, December.

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    Keywords

    Farm Management; Risk and Uncertainty;

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