Hedging behavior of agribusiness cooperatives and investor-owned firms in Germany

Robin Nienhaus, Jason R.V. Franken*, Joost M.E. Pennings

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

While agriculture is unique with respect to the prevalence of producer owned cooperatives (coops) operating alongside and investor owned firms (IOFs), little is known about their relative reliance on futures markets to hedge commodity price risk. This study investigates factors influencing the hedging behavior of both business forms and finds that each are significantly impacted by the perspective of key influencers of their decision making units (e.g., employees, members, shareholders, board of directors, advisors, consultants, bankers). Notably, coops are found to be more likely to hedge using futures but do so more sparingly (i.e., lower hedging ratios), which may reflect an ability to conduct natural hedges internally and/or less speculative positions taken in futures markets. [Econ Lit classification: Q130].
Original languageEnglish
Article number100219
JournalJournal of Co-operative Organization and Management
Volume11
Issue number2
DOIs
Publication statusPublished - 1 Dec 2023

Keywords

  • Agribusiness
  • Cooperatives
  • Futures Market
  • Hedging
  • Risk Attitude

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