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Diversification and Resilience of Firms in the Agri-Food Supply Chain

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  • Stevens, Andrew W.
  • Teal, Jim

Abstract

Are diversified firms more resilient to negative market shocks than specialized firms? We answer this question in the context of the COVID‐19 pandemic by analyzing data from small‐ and medium‐sized firms in the U.S. agrifood supply chain. We first develop revenue‐based measures of firms' vertical (across supply‐chain segment) and horizontal (within supply‐chain segment) diversification. We then compare post pandemic outcomes of more diversified and less diversified firms using several inverse‐probability weighting techniques. We find that vertical diversification reduces firms' resilience, whereas horizontal diversification increases firms' resilience.
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Suggested Citation

  • Stevens, Andrew W. & Teal, Jim, 2022. "Diversification and Resilience of Firms in the Agri-Food Supply Chain," 2022 Agricultural and Rural Finance Markets in Transition, October 17-18, 2022, Detroit, Michigan 329264, Regional Research Committee NC-1177 (formerly NC-1014): Agricultural and Rural Finance Markets in Transition.
    • Handle: RePEc:ags:nc1117:329264
    DOI: 10.22004/ag.econ.329264
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    References listed on IDEAS

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    Cited by:

    1. Ann M. Furbush & Anna Josephson & Talip Kilic & Jeffrey D. Michler, 2024. "Coping or Hoping? Livelihood Diversification and Food Insecurity in the COVID-19 Pandemic," Papers 2409.02285, arXiv.org.
    2. Hadachek, Jeffrey & Ma, Meilin, 2024. "Risk Externalities in Vertical Supply Chains," 2024 Annual Meeting, July 28-30, New Orleans, LA 343748, Agricultural and Applied Economics Association.
    3. Timothy J. Richards & Zachariah Rutledge & Marcelo Castillo, 2024. "Labor shortages and agricultural trucking rates," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 72(2), pages 105-129, June.

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