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

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

Research output: Research - peer-review › 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
StatePublished - 16 Feb 2018

Fingerprint

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

Cite this

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: Research - peer-review › 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. DOI: 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. Available from, DOI: 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.
@article{46773ec64d4846768baa945abc5f1544,
title = "A Hybrid Approach to Explore the Risk Dependency Structure among Agribusiness Firms",
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.",
keywords = "risk losses, agribusiness, minimum spanning trees, copula, dependence structure",
author = "Zhimei Lei and Kuo-Jui Wu and Li Cui and Lim, {Ming K}",
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/).",
year = "2018",
month = "2",
doi = "10.3390/su10020533",
volume = "10",
journal = "Sustainability",
issn = "2071-1050",
publisher = "MDPI",
number = "2",

}

TY - JOUR

T1 - A Hybrid Approach to Explore the Risk Dependency Structure among Agribusiness Firms

AU - Lei ,Zhimei

AU - Wu ,Kuo-Jui

AU - Cui,Li

AU - Lim,Ming K

N1 - 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/).

PY - 2018/2/16

Y1 - 2018/2/16

N2 - 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.

AB - 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.

KW - risk losses

KW - agribusiness

KW - minimum spanning trees

KW - copula

KW - dependence structure

U2 - 10.3390/su10020533

DO - 10.3390/su10020533

M3 - Article

VL - 10

JO - Sustainability

T2 - Sustainability

JF - Sustainability

SN - 2071-1050

IS - 2

M1 - 533

ER -

Access to Document