Purpose
The purpose of this paper is to review and examine the recent investment trends of firms operating in the food, feed and biofuel production and processing sectors in Latin America. The inter-related nature of these three sub-sectors and the great expansion they have gone through in the last decade showcases a series of socioeconomic and environmental policy challenges thus making it relevant to identify their different business models through a typology.
Design/methodology/approach
The paper first presents an unprecedented literature review based on field observations and media coverage of agri-business strategies of the food, feed and biofuel production in the region. It then moves to an in-depth analysis of investment operations that serve to classify such firms into a business model typology considering degree of internationalization and integration. The typology is a useful mechanism to enhance public policy analysis and uncover market or government incentives behind business decisions.
Findings
By focusing on investment strategies, the paper illustrates how both market and government incentives shape and affect the performance and consolidation of different players in the food, feed and biofuel sub-sectors in Latin America. The resulting effects have strong economic as well as social and environmental implications because such economic activities have an impact on global food and energy security.
Research limitations/implications
Limitations include a reliance on largely qualitative evidence and research methods due to unavailability of consistent numerical data in these specific agri-business sub-sectors.
Originality/value
This paper is unique in its focus on business models in a particularly relevant set of agri-business sub-sectors in Latin America and its implications to promote investment and innovation in value chain development while considering regional-specific challenges.
This study examines the environmental impacts of trade liberalization in Costa Rica. A CGE model is constructed which includes eight environmental indicators covering deforestation, pesticides, overfishing, hazardous wastes, inorganic wastes, organic wastes, greenhouse gases, and air pollution. Three trade liberalization scenarios are examined. Two sets of analyses are conducted for each scenario, one in which technologies do not change in response to trade liberalization and the other in which total factor productivity in each sector changes in response to changes in imports of machinery and equipment. To account for uncertainty regarding values of the model's parameters, a Monte Carlo experiment is conducted for each policy option. The impacts of trade liberalization on the environmental indicators are generally negative in sign but small or moderate in magnitude, both when technology is constant and when technology is allowed to vary.
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