External Transaction Costs and Large-scale Farming in Moscow Oblast
AbstractThe article addresses the reasons for the domination of large-scale corporate farms in the Moscow oblast of Russia and concludes that high external transaction costs are likely to be an important determining factor. Over the nine year period studied, larger farms are shown to achieve higher performance. Increasing returns to scale, however, were not significant in explaining the superior performance of the larger farms. It is hypothesised that high external transaction costs due to lack of transparency in the milk market, typical of underdeveloped markets, give the larger farms a competitive advantage. Their search costs per unit of output are relatively low and they are able therefore to achieve higher farm-gate prices for milk as a result. The results confirm the dependence of the farm-gate milk price on farm size due to the presence of high transaction costs in the market of milk, the major output of the studied farms. The high performance farms were able to grow during the study period whereas the lower performing farms had limited growth capacity. A more competitive and transparent market environment along with improved infrastructure could lower transaction costs and entry barriers and provide opportunities for smaller scale corporate farms to compete more effectively. Copyright (c) 2010 The Author. Journal compilation (c) The Agricultural Ecomomics Society and the European Association of Agricultural Economists 2010.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by The Agricultural Economics Society in its journal EuroChoices.
Volume (Year): 9 (2010)
Issue (Month): 2 (08)
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=1478-0917
More information through EDIRC
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.