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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.

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Conventional wisdom and increasing empirical evidence in microfinance hold that women are better risks than men. In the present work, a logit model controlling for a range of borrower and loan characteristics was carried out to assess the validity of this statement by comparing repayment rates. The study includes a sample of loans disbursed by a Nicaraguan microfinance institution during the years 2003-2004, a period characterized by high oil prices. A dichotomous dependent variable is created, taking the value of 1 if the credit turned out to be of the best quality i.e. an "A" credit by Nicaraguan regulations, and 0 otherwise. The dependent variable is regressed on variables summarizing the characteristics of the borrower and the loan to investigate the impact of gender on repayment performance. The results provide significant evidence that female client's repayment performance is in fact better than that of male's at the conventional levels of statistical significance. However, the results also show that the perceived difference in gender risk is lower than what popular wisdom would suggest when borrower characteristics and other exogenous economic variables are taken into account. With the present sample, we conclude that other characteristics of the borrower as well as changes in the economic environment can have a similar or larger impact on risk than gender when it comes to repayment performance.

The Government of Sierra Leone's National Sustainable Agriculture Development Plan (NSADP) 2010-2030 recommends the gradual eradication of shifting cultivation practices and the active promotion of vertically integrated processing and marketing chains for selected staples (mainly rice and cassava) and export crops (cocoa and coffee). This article examines the implications of the changing national agricultural policy for the subsistence and semisubsistence farmers who represent about two-thirds of the population of Sierra Leone. Using socioeconomic data from a 2009 survey of 600 farm-households located in the country's two main agricultural regions, we classified farms according to the diversity of the crops cultivated. The results illustrate the potential impact on rural livelihoods of the implementation of the NSADP and the challenges related to the transition period required to replace shifting cultivation with permanent agricultural systems.

By developing meta-frontier efficiency and structural equation models, the paper examines whether farm economic viability is positively associated with technical efficiency in a highly food insecure context, such as that of rural Sierra Leone. The findings show that technical efficiency can be a sufficient but not necessary condition in determining economic viability of smallholder farming. It is possible to breach reproductive thresholds at the cost of reduced technical efficiency, when the crop diversification strategy of smallholders includes market-oriented high-value crops. This calls for a dual policy approach that addresses farmers’ internal needs for self-consumption (increasing efficiency of food crop production) while encouraging market-oriented cash crop production (diversification assisted through the reduction of associated transaction costs and the establishment of accessible commercialization channels of export related crops and/or high-value crops). The work also calls out for a move-up or move-out strategy for small holders to create viable farming systems in developing world.

This paper examines the Transaction Cost Economics (TCE) theory of capital structure and finds that for the case of equity the usual TCE logic is not fully worked out. In particular, an analysis of the key issue of bilateral dependency between the firm and its shareholders is absent. To fill this gap in the literature, the paper further develops the theory of the equity governance structure by taking account of the concept of bilateral dependency over the lifecycle of the firm. The paper finds that, both theoretically and empirically, contractual hazards are indeed mitigated for the case of fast growing young firms which are dependent on shareholders to finance future growth. In contrast, for the case of mature firms, which in virtue of their large free cash flows are independent from shareholders, contractual safeguards are altered to the disadvantage of shareholders and consequently managerial discretion costs increase.