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Transaction Costs as Determinants of Vertical Coordination in the U.S. Food Industries

Transaction Costs as Determinants of Vertical Coordination in the U.S. Food Industries Vertical coordination is a more comprehensive concept than vertical integration, capturing market, contractual, and ownership coordination. Williamson suggests that transaction costs motivate the use of nonmarket arrangements to vertically coordinate production. This paper presents a vertical coordination index incorporating industry input‐output relationships and nonmarket arrangements. In an econometric analysis, the vertical coordination index is utilized to examine transaction cost effects on food industry vertical linkages. Empirical results support the hypothesis that transaction costs are a primary motivation to vertically coordinate via nonmarket arrangements. Results also suggest the vertical coordination index is more robust than traditional vertical integration measure. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Journal of Agricultural Economics Wiley

Transaction Costs as Determinants of Vertical Coordination in the U.S. Food Industries

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References (14)

Publisher
Wiley
Copyright
© Agricultural and Applied Economics Association
ISSN
0002-9092
eISSN
1467-8276
DOI
10.2307/1243192
Publisher site
See Article on Publisher Site

Abstract

Vertical coordination is a more comprehensive concept than vertical integration, capturing market, contractual, and ownership coordination. Williamson suggests that transaction costs motivate the use of nonmarket arrangements to vertically coordinate production. This paper presents a vertical coordination index incorporating industry input‐output relationships and nonmarket arrangements. In an econometric analysis, the vertical coordination index is utilized to examine transaction cost effects on food industry vertical linkages. Empirical results support the hypothesis that transaction costs are a primary motivation to vertically coordinate via nonmarket arrangements. Results also suggest the vertical coordination index is more robust than traditional vertical integration measure.

Journal

American Journal of Agricultural EconomicsWiley

Published: Nov 1, 1992

Keywords: ; ; ; ; ; ; ;

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