Agency Theory, Futures Markets and Risk Shifting in Commodity Marketing Channels

J.K.M. Kuwornu; W.E. Kuiper; J.M.E. Pennings; M.T.G. Meulenberg

Agency Theory, Futures Markets and Risk Shifting in Commodity Marketing Channels

J.K.M. Kuwornu
, W.E. Kuiper
, J.M.E. Pennings
, M.T.G. Meulenberg

Marketing and Consumer Behaviour

Research output: Chapter in Book/Report/Conference proceeding › Conference paper › Academic › peer-review

Abstract

This paper applies agency theory to access risk shifting between the principal (marketing firms) and the agent (farmers) in a food marketing channel. It compares the case in which there is a futures market available for the risk-averse agents with the case in which there is no futures trading. The empirical results regarding the Dutch ware potato marketing channel reveal that risk shifting from marketing firms to farmers, possibly as a consequence of chain reversal, can be better managed to farmers if they trade on a futures market. This demonstrates the hedging role of futures contracts as a price-risk management instrument. Keywords: futures markets, agency theory, risk shifting, chain reversal, commodity marketing channels

Original language	English
Title of host publication	Dynamics in Chains and Networks. Proceedings of the sixth International Conference on Chain and Network Management in Agribusiness and the Food Industry, Wageningen, 27-28 May 2004
Place of Publication	Wageningen
Publisher	Wageningen Academic Publishers
Pages	510-517
ISBN (Print)	9789076998404
Publication status	Published - 2004
Event	6th International Conference on Chain and Network Management in Agribusiness and the Food Industry - Duration: 27 May 2004 → 28 May 2004

Conference/symposium

Conference/symposium	6th International Conference on Chain and Network Management in Agribusiness and the Food Industry
Period	27/05/04 → 28/05/04

Keywords

food industry
marketing channels
futures trading

Access to Document

https://edepot.wur.nl/233405

Cite this

Kuwornu, J. K. M., Kuiper, W. E., Pennings, J. M. E., & Meulenberg, M. T. G. (2004). Agency Theory, Futures Markets and Risk Shifting in Commodity Marketing Channels. In Dynamics in Chains and Networks. Proceedings of the sixth International Conference on Chain and Network Management in Agribusiness and the Food Industry, Wageningen, 27-28 May 2004 (pp. 510-517). Wageningen Academic Publishers. https://edepot.wur.nl/233405

Kuwornu, J.K.M. ; Kuiper, W.E. ; Pennings, J.M.E. et al. / Agency Theory, Futures Markets and Risk Shifting in Commodity Marketing Channels. Dynamics in Chains and Networks. Proceedings of the sixth International Conference on Chain and Network Management in Agribusiness and the Food Industry, Wageningen, 27-28 May 2004. Wageningen : Wageningen Academic Publishers, 2004. pp. 510-517

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title = "Agency Theory, Futures Markets and Risk Shifting in Commodity Marketing Channels",

abstract = "This paper applies agency theory to access risk shifting between the principal (marketing firms) and the agent (farmers) in a food marketing channel. It compares the case in which there is a futures market available for the risk-averse agents with the case in which there is no futures trading. The empirical results regarding the Dutch ware potato marketing channel reveal that risk shifting from marketing firms to farmers, possibly as a consequence of chain reversal, can be better managed to farmers if they trade on a futures market. This demonstrates the hedging role of futures contracts as a price-risk management instrument. Keywords: futures markets, agency theory, risk shifting, chain reversal, commodity marketing channels",

keywords = "voedselindustrie, marketingkanalen, termijnhandel, food industry, marketing channels, futures trading",

author = "J.K.M. Kuwornu and W.E. Kuiper and J.M.E. Pennings and M.T.G. Meulenberg",

year = "2004",

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publisher = "Wageningen Academic Publishers",

address = "Netherlands",

note = "6th International Conference on Chain and Network Management in Agribusiness and the Food Industry ; Conference date: 27-05-2004 Through 28-05-2004",

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Kuwornu, JKM, Kuiper, WE, Pennings, JME & Meulenberg, MTG 2004, Agency Theory, Futures Markets and Risk Shifting in Commodity Marketing Channels. in Dynamics in Chains and Networks. Proceedings of the sixth International Conference on Chain and Network Management in Agribusiness and the Food Industry, Wageningen, 27-28 May 2004. Wageningen Academic Publishers, Wageningen, pp. 510-517, 6th International Conference on Chain and Network Management in Agribusiness and the Food Industry, 27/05/04. <https://edepot.wur.nl/233405>

Agency Theory, Futures Markets and Risk Shifting in Commodity Marketing Channels. / Kuwornu, J.K.M.; Kuiper, W.E.; Pennings, J.M.E. et al.
Dynamics in Chains and Networks. Proceedings of the sixth International Conference on Chain and Network Management in Agribusiness and the Food Industry, Wageningen, 27-28 May 2004. Wageningen: Wageningen Academic Publishers, 2004. p. 510-517.

Research output: Chapter in Book/Report/Conference proceeding › Conference paper › Academic › peer-review

TY - GEN

T1 - Agency Theory, Futures Markets and Risk Shifting in Commodity Marketing Channels

AU - Kuwornu, J.K.M.

AU - Kuiper, W.E.

AU - Pennings, J.M.E.

AU - Meulenberg, M.T.G.

PY - 2004

Y1 - 2004

N2 - This paper applies agency theory to access risk shifting between the principal (marketing firms) and the agent (farmers) in a food marketing channel. It compares the case in which there is a futures market available for the risk-averse agents with the case in which there is no futures trading. The empirical results regarding the Dutch ware potato marketing channel reveal that risk shifting from marketing firms to farmers, possibly as a consequence of chain reversal, can be better managed to farmers if they trade on a futures market. This demonstrates the hedging role of futures contracts as a price-risk management instrument. Keywords: futures markets, agency theory, risk shifting, chain reversal, commodity marketing channels

AB - This paper applies agency theory to access risk shifting between the principal (marketing firms) and the agent (farmers) in a food marketing channel. It compares the case in which there is a futures market available for the risk-averse agents with the case in which there is no futures trading. The empirical results regarding the Dutch ware potato marketing channel reveal that risk shifting from marketing firms to farmers, possibly as a consequence of chain reversal, can be better managed to farmers if they trade on a futures market. This demonstrates the hedging role of futures contracts as a price-risk management instrument. Keywords: futures markets, agency theory, risk shifting, chain reversal, commodity marketing channels

KW - voedselindustrie

KW - marketingkanalen

KW - termijnhandel

KW - food industry

KW - marketing channels

KW - futures trading

M3 - Conference paper

SN - 9789076998404

SP - 510

EP - 517

BT - Dynamics in Chains and Networks. Proceedings of the sixth International Conference on Chain and Network Management in Agribusiness and the Food Industry, Wageningen, 27-28 May 2004

PB - Wageningen Academic Publishers

CY - Wageningen

T2 - 6th International Conference on Chain and Network Management in Agribusiness and the Food Industry

Y2 - 27 May 2004 through 28 May 2004

ER -

Kuwornu JKM, Kuiper WE, Pennings JME, Meulenberg MTG. Agency Theory, Futures Markets and Risk Shifting in Commodity Marketing Channels. In Dynamics in Chains and Networks. Proceedings of the sixth International Conference on Chain and Network Management in Agribusiness and the Food Industry, Wageningen, 27-28 May 2004. Wageningen: Wageningen Academic Publishers. 2004. p. 510-517

Agency Theory, Futures Markets and Risk Shifting in Commodity Marketing Channels

Abstract

Conference/symposium

Keywords

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