A Hybrid Approach to Explore the Risk Dependency Structure among Agribusiness Firms

Zhimei Lei , Kuo-Jui Wu , Li Cui, Ming K Lim

Research output: Contribution to journal › Article

Abstract

Although the risk management of agricultural firms is important, studies on the extreme risk dependence among agribusiness firms are minimal due to the diversity and complexity of the risks faced by agricultural firms. In this study, we developed a hybrid approach to analyse and uncover the potential risk dependence among agricultural firms. We examined thirty-two agricultural companies to study their dependence structure for risk losses. Three primary findings emerged. First, risk dependence is strong with an average value of 0.96. Second, the dependence structure is hierarchical and includes two network communities. Third, some key agricultural firms were identified in the dependence structure. These key firms are critical for the transmission of negative impacts across agricultural firms. Correspondingly, we suggest measures and strategies (such as improving the level of technological innovation and joint risk resistance capability) to reduce the impact of risk dependence.
LanguageEnglish
Article number533
Number of pages17
JournalSustainability
Volume10
Issue number2
DOIs
Publication statusPublished - 16 Feb 2018

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agroindustry
firm
technical innovation
Risk management
risk management
innovation
Innovation
community

Bibliographical note

This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).

Keywords

  • risk losses
  • agribusiness
  • minimum spanning trees
  • copula
  • dependence structure

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A Hybrid Approach to Explore the Risk Dependency Structure among Agribusiness Firms. / Lei , Zhimei; Wu , Kuo-Jui; Cui, Li; Lim, Ming K.

In: Sustainability, Vol. 10, No. 2, 533, 16.02.2018.

Research output: Contribution to journal › Article

Lei , Z, Wu , K-J, Cui, L & Lim, MK 2018, 'A Hybrid Approach to Explore the Risk Dependency Structure among Agribusiness Firms', Sustainability, vol. 10, no. 2, 533. https://doi.org/10.3390/su10020533
Lei Z, Wu K-J, Cui L, Lim MK. A Hybrid Approach to Explore the Risk Dependency Structure among Agribusiness Firms. Sustainability. 2018 Feb 16;10(2). 533. https://doi.org/10.3390/su10020533
Lei , Zhimei ; Wu , Kuo-Jui ; Cui, Li ; Lim, Ming K. / A Hybrid Approach to Explore the Risk Dependency Structure among Agribusiness Firms. In: Sustainability. 2018 ; Vol. 10, No. 2.
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