Three Essays on the Role of Ownership in the Food Economy

Abstract

This dissertation helps to determine the role of ownership and the ways in which firms interact in the food economy. The three essays in this dissertation show how ownership structure affects the decisions of entry and exit, the pricing of retail food products, and where and how to locate international food economy firm operations. The first essay examines the entry and exit decisions of cooperative and non-cooperative firms into the U.S. corn-ethanol industry. This essay finds that cooperatives enter the industry sooner and exit later. This was partly due to policy driven incentives. The second essay analyzes the differential impact of a food retail acquisition on national brand and store brand prices. This essay finds that the acquiring retailer is likely able to exert market power in branded product categories such as Ready-to-Eat cereal, but not in homogeneous product categories such as fluid milk. The third and final essay explores the impact of changing governance institutional ownership and how the quality of institutions affect foreign investment decisions of food economy firms interested in locating operations in a foreign country. The essay finds that new economic policies, LEAP zones, can reduce risks for food economy firms by improving governance institutions. However, a case study of its implementation in Honduras shows that they can be hard to execute in practice and may lose many of the potential benefits accordingly.