IDEAS home Printed from https://ideas.repec.org/a/bla/agecon/v33y2005is3p399-410.html
   My bibliography  Save this article

Financial structure, production, and productivity: evidence from the U.S. food manufacturing industry

Author

Listed:
  • Ferdaus Hossain
  • Ruchi Jain
  • Ramu Govindasamy

Abstract

This study integrates production and financing to examine the impacts of financial structure change on the production, profitability, and productivity growth in the U.S. food manufacturing industry. Empirical results show that during the period covered by this study, agency cost associated with increased debt use by this industry negatively affected its output growth, input demand, profitability, and overall productivity growth. Dividend payment positively contributed to the production and performance of this industry via signaling benefit. However, the negative effects of increased debt use by this industry far outweighed the positive contribution of dividend payment. The U.S. food industry achieved a 0.9% average annual productivity growth, which came primarily from technological progress and capital adjustment. The rapid increase in debt use by this industry was responsible for slowing down the pace of productivity growth via its negative contribution to the total factor productivity growth. Capital expansion was the principal driver of output growth and profitability in this industry.

Suggested Citation

  • Ferdaus Hossain & Ruchi Jain & Ramu Govindasamy, 2005. "Financial structure, production, and productivity: evidence from the U.S. food manufacturing industry," Agricultural Economics, International Association of Agricultural Economists, vol. 33(s3), pages 399-410, November.
    • Handle: RePEc:bla:agecon:v:33:y:2005:i:s3:p:399-410
    DOI: 10.1111/j.1574-0864.2005.00080.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1574-0864.2005.00080.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1574-0864.2005.00080.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Martin Feldstein, 1987. "The Effects of Taxation on Capital Accumulation," NBER Books, National Bureau of Economic Research, Inc, number feld87-1.
    2. Bernstein, J.I. & Nadiri, M.I., 1993. "Production, Financial Structure and Productivity Growth in U.S. Manufacturing," Working Papers 93-10, C.V. Starr Center for Applied Economics, New York University.
    3. Martin Feldstein, 1987. "Introduction to "The Effects of Taxation on Capital Accumulation"," NBER Chapters, in: The Effects of Taxation on Capital Accumulation, pages 1-6, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Engida, Tadesse Getacher & Rao, Xudong & Oude Lansink, Alfons G.J.M., 2020. "A dynamic by-production framework for analyzing inefficiency associated with corporate social responsibility," European Journal of Operational Research, Elsevier, vol. 287(3), pages 1170-1179.
    2. MCarmen Martínez‐Victoria & Alfons Oude Lansink, 2024. "Risk and return efficiency of manufacturing firms: Integrating corporate social responsibility performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 3735-3744, September.
    3. Guo, Shu & Zhang, ZhongXiang, 2023. "Green credit policy and total factor productivity: Evidence from Chinese listed companies," Energy Economics, Elsevier, vol. 128(C).
    4. Małgorzata Juchniewicz & Katarzyna Łukiewska, 2021. "Diversity of the international competitive performance of the food industry of the European Union member states," Agribusiness, John Wiley & Sons, Ltd., vol. 37(2), pages 422-437, April.
    5. Lopez, Rigoberto A., 2022. "The Dimensions of Productivity Change in the U.S. Food Manufacturing Industries," 2023 Allied Social Sciences Association (ASSA) Annual Meeting, January 6-8, 2023, New Orleans, Louisiana 316831, Agricultural and Applied Economics Association.
    6. Konstantinos N. Konstantakis & Panagiotis T. Cheilas & Ioannis G. Melissaropoulos & Panos Xidonas & Panayotis G. Michaelides, 2023. "Supply chains and fake news: a novel input–output neural network approach for the US food sector," Annals of Operations Research, Springer, vol. 327(2), pages 779-794, August.
    7. Jordi Jaumandreu & Rigoberto Lopez, 2024. "Markups in US food manufacturing accounting for non‐neutral productivity," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(2), pages 573-591, June.
    8. Jin, Shaosheng & Guo, Haiyue & Delgado, Michael S. & Wang, H. Holly, 2017. "Benefit or damage? The productivity effects of FDI in the Chinese food industry," Food Policy, Elsevier, vol. 68(C), pages 1-9.
    9. Papageorgiou, Theofanis & Michaelides, Panayotis G. & Milios, John, 2009. "Economic Fluctuations, Cyclical Regularities and Technological Change: The U.S. Food Sector (1958–2006)," MPRA Paper 67115, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mdee, Ephraim Oswald & Aikaeli, Jehovaness & Luvanda, Eliab, 2022. "The Impact of Taxes on Capital Formation in Tanzania," African Journal of Economic Review, African Journal of Economic Review, vol. 10(5), December.
    2. Hossain, Ferdaus & Jain, Ruchi, 2001. "Financial Structure, Production and Productivity Growth in U.S. Food Manufacturing Industry," 2001 Annual meeting, August 5-8, Chicago, IL 20756, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Ben Broadbent & Michael Kremer, 1997. "Does Favorable Tax-Treatment of Housing Reduce Equipment Investment?," NBER Working Papers 6161, National Bureau of Economic Research, Inc.
    4. Pierre-Pascal Gendron, 1996. "Corporation Tax Asymmetries: An Oligopolistic Supergame Analysis," Working Papers ecpap-96-04, University of Toronto, Department of Economics.
    5. James M. Poterba & Steven F. Venti & David A. Wise, 1996. "How Retirement Saving Programs Increase Saving," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 91-112, Fall.
    6. Francisco Gallego Y. & Norman Loayza., 2000. "Financial Structure in Chile: Macroeconomic Developments and Microeconomic Effects," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 3(2), pages 5-30, August.
    7. Huizinga, H.P., 1992. "The welfare effects of individual retirement accounts," Other publications TiSEM b40e9389-e4cb-4a54-beca-b, Tilburg University, School of Economics and Management.
    8. Schneider, Georg & Sureth, Caren, 2010. "The impact of profit taxation on capitalized investment with options to delay and divest," arqus Discussion Papers in Quantitative Tax Research 97, arqus - Arbeitskreis Quantitative Steuerlehre.
    9. Andreas PEICHL, 2008. "The Benefits of Linking CGE and Microsimulation Models - Evidence from a Flat Tax analysis," EcoMod2008 23800106, EcoMod.
    10. Hubbard, R. Glenn & Skinner, Jonathan & Zeldes, Stephen P., 1994. "The importance of precautionary motives in explaining individual and aggregate saving," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 40(1), pages 59-125, June.
    11. Andreas Peichl, 2009. "The Benefits and Problems of Linking Micro and Macro Models — Evidence from a Flat Tax Analysis," Journal of Applied Economics, Taylor & Francis Journals, vol. 12(2), pages 301-329, November.
    12. Gatti, Roberta & Love, Inessa, 2006. "Does access to credit improve productivity ? Evidence from Bulgarian firms," Policy Research Working Paper Series 3921, The World Bank.
    13. Patric H. Hendershott, 1988. "The Tax Reform Act Of 1986 And Economic Growth," NBER Working Papers 2553, National Bureau of Economic Research, Inc.
    14. Steven A. Sharpe & Gustavo A. Suarez, 2013. "The insensitivity of investment to interest rates: Evidence from a survey of CFOs," Finance and Economics Discussion Series 2014-2, Board of Governors of the Federal Reserve System (U.S.).
    15. Joseph Gyourko & Todd Sinai, "undated". "The Spatial Distribution of Housing-Related Tax Benefits in the United States," Zell/Lurie Center Working Papers 399, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania.
    16. Laura Wegener, 2017. "Strukturelle Unterschiede zwischen positiven und negativen Einkünften – eine Untersuchung der einkommensteuerlichen Verlusteinkunftsarten Gewerbebetrieb sowie Vermietung und Verpachtung auf Basis des ," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 11(3), pages 177-204, December.
    17. Chaoshin Chiao, 2002. "Relationship between debt, R&D and physical investment, evidence from US firm-level data," Applied Financial Economics, Taylor & Francis Journals, vol. 12(2), pages 105-121.
    18. Ligia Alba Melo-Becerra & Javier Ávila Mahecha & Jorge Enrique Ramos-Forero, 2017. "The Effect of Corporate Taxes on Investment: Evidence from the Colombian Firms," IHEID Working Papers 10-2017, Economics Section, The Graduate Institute of International Studies.
    19. repec:aer:wpaper:47 is not listed on IDEAS
    20. Lund, Diderik, 2009. "Marginal versus Average Beta of Equity under Corporate Taxation," Memorandum 12/2009, Oslo University, Department of Economics.
    21. Hebous, Shafik & Ruf, Martin, 2017. "Evaluating the effects of ACE systems on multinational debt financing and investment," Journal of Public Economics, Elsevier, vol. 156(C), pages 131-149.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:agecon:v:33:y:2005:i:s3:p:399-410. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.