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Transaction costs, product specialisation and farm structure in Central and Eastern Europe

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Author Info

  • Pavel Ciaian
  • Jan Pokrivcak
  • Dusan Drabik

Abstract

In Western Europe, the USA and other developed countries agriculture is dominated by small family farms. In Central and Eastern European countries (CEECs) a dual structure of farms exists. There are large corporate farms (CF) and small family farms (FF) in CEECs. This article shows that both CF and FF specialise in commodities in which they have a comparative advantage. CF specialise in capital-intensive products and in products with low labour monitoring requirements. FF specialise in products with higher labour monitoring requirements. The implication of this study is that farm structure indirectly determines in which products a country will be competitive on international markets. This is especially important for transition countries where high transaction costs hinder changes of farm organisation. Because of high transaction costs, farms are more flexible in adjusting production structure than adjusting farm organisation in transition countries.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/14631370902778526
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Post-Communist Economies.

Volume (Year): 21 (2009)
Issue (Month): 2 ()
Pages: 191-201

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Handle: RePEc:taf:pocoec:v:21:y:2009:i:2:p:191-201

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Web page: http://www.tandfonline.com/CPCE20

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Cited by:
  1. Ciaian, Pavel & Kancs, d'Artis & Pokrivcak, Jan, 2011. "Comparative Advantages, Transaction Costs and Factor Content in Agricultural Trade: Empirical Evidence from the CEE - Vantaggi comparati, costi di transazione e contenuto dei fattori nel commercio agr," Economia Internazionale / International Economics, Camera di Commercio di Genova, vol. 64(1), pages 67-101.
  2. LanÄariÄ, Drahoslav & Tóth, Marián & Savov, Radovan, 2013. "Which legal form of agricultural firm based on return on equity should be preferred? A panel data analysis of Slovak agricultural firms," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 115(3), December.

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