Long-Term Contracts and Asset Specificity Revisited: An Empirical Analysis of Producer–Importer Relations in the Natural Gas Industry

Long-Term Contracts and Asset Specificity Revisited: An Empirical Analysis of Producer–Importer... This paper discusses long-term contracts as a particular organizational form situated somewhere between full vertical integration and short-term, market-based trading in the natural gas industry. We focus on the determinants of the duration of contracts under changing technical, economic, and institutional conditions. Using 311 long-term contracts we find that duration decreases as international market structures grow more competitive, and that contracts linked to an asset-specific investment extend, on average, three years longer. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Long-Term Contracts and Asset Specificity Revisited: An Empirical Analysis of Producer–Importer Relations in the Natural Gas Industry

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Publisher
Springer Journals
Copyright
Copyright © 2008 by Springer Science+Business Media, LLC.
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-008-9165-0
Publisher site
See Article on Publisher Site

Abstract

This paper discusses long-term contracts as a particular organizational form situated somewhere between full vertical integration and short-term, market-based trading in the natural gas industry. We focus on the determinants of the duration of contracts under changing technical, economic, and institutional conditions. Using 311 long-term contracts we find that duration decreases as international market structures grow more competitive, and that contracts linked to an asset-specific investment extend, on average, three years longer.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Jun 5, 2008

References

  • Contracts and quality in the California winegrape industry
    Goodhue, R.E.; Heien, D.M.; Lee, H.; Summer, D.A.
  • Regulation and deregulation after 25 years: Lessons learned for research in industrial organization
    Joskow, P.L.

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