This article shows how private equity capital has been involved in the structural development of the Norwegian agro-food chain since the 1990’s.
The Norwegian social-democratic model of agriculture, with its attempts to maintain farming all over the country, struggles with comparative disadvantages in productivity and Private Equity capital is investing in direct competition with farmer cooperatives.
An outline of the socio-economic characteristics of the Norwegian model as well as those of Private Equity illuminates why they both fit well together. Thus, we argue in this paper that it is not the Norwegian model of agriculture that attracts finance capital and discuss whether this involvement of finance capital can be considered a process of financialization.
Findings based on an analysis of case studies of Private Equity, into the agri-food industry, suggest that the economic motives of Private Equity takeovers are based on a combination of typical industry capitalism with investments in productivity and efficiency, rather than merely financialization.
The findings are interpreted in a variety of capitalism framework combining social theory on financialization with business school theories on Private Equity transaction.
The article is part of Bjørn Klimek’s PhD: Food industry structure in Norway and Denmark since the 1990s. Path dependence and institutional trajectories in Nordic food markets