Agency Theory Issues in the Food Processing Industry

The objective is to identify significant determinants of performance for food processing firms over the 1992 to 2003 time period, focusing particularly on the issue of family control. Variables measuring firm effects such as asset size, governance, income distribution, and risk are used to explain return on equity. This study builds upon previous research by including a measure of income distribution in the food processing industry. Governance variables are found to be significant determinants of return on equity. The results found no evidence of agency problems in family-controlled firms during this time period.