Diversification and resilience of firms in the agrifood supply chain
Stevens, Andrew W.
Diversification and resilience of firms in the agrifood supply chain - American Journal of Agricultural Economics 2024 - 739-778
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.
1467-8276
Agrifood Supply Chain
Diversification
Resilience
Diversification and resilience of firms in the agrifood supply chain - American Journal of Agricultural Economics 2024 - 739-778
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.
1467-8276
Agrifood Supply Chain
Diversification
Resilience