Vertical integration in the wine industry: a transaction costs analysis on the Rioja DOCa
AbstractThe authors study the determinants of make or buy decisions for grapes made by wineries belonging to the Rioja Qualified Designation of Origin (DOCa). In particular, they analyze the relationship between product quality and vertical integration. Although there is a long tradition in transaction cost theory of analyzing the determinants of make or buy decisions in manufacturing, surprisingly few empirical studies have been conducted in the agriculture and food and beverage industry. Likewise, although quality is a key competitive variable in many food sectors, only a few studies have analyzed quality in their models. The authors find that transaction costs and product quality provide a useful explanation of vertical integration in the wine industry in the Rioja DOCa. Wineries that produce high-quality wines are more likely to integrate vertically than those producing low-quality wines. They also find that the size of the winery significantly affects make or buy choices. Implications are explored for managers facing a governance mode choice. [EconLit Classifications: L220, Q130]. © 2009 Wiley Periodicals, Inc.
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.
Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Agribusiness.
Volume (Year): 25 (2009)
Issue (Month): 2 ()
Contact details of provider:
Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daniel McFadden, 1977. "Quantitative Methods for Analyzing Travel Behaviour of Individuals: Some Recent Developments," Cowles Foundation Discussion Papers 474, Cowles Foundation for Research in Economics, Yale University.
- Erin Anderson, 1985. "The Salesperson as Outside Agent or Employee: A Transaction Cost Analysis," Marketing Science, INFORMS, vol. 4(3), pages 234-254.
- Benito Arruñada & Manuel González-Díaz & Alberto Fernández, 2004.
"Determinants of organizational form: transaction costs and institutions in the European trucking industry,"
Industrial and Corporate Change,
Oxford University Press, vol. 13(6), pages 867-882, December.
- Benito Arruñada & Manuel González & Alberto Fernández, 2004. "Determinants of organizational form: Transaction costs and institutions in the European trucking industry," Economics Working Papers 767, Department of Economics and Business, Universitat Pompeu Fabra.
- Fan, Joseph P. H., 2000. "Price uncertainty and vertical integration: an examination of petrochemical firms," Journal of Corporate Finance, Elsevier, vol. 6(4), pages 345-376, December.
- John, George & Weitz, Barton A, 1988. "Forward Integration into Distribution: An Empirical Test of Transaction Cost Analysis," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(2), pages 337-55, Fall.
- Gatignon, Hubert & Anderson, Erin, 1988. "The Multinational Corporation's Degree of Control over Foreign Subsidiaries: An Empirical Test of a Transaction Cost Explanation," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(2), pages 305-36, Fall.
- Hennart, J.-F.M.A., 1989. "Transaction costs theory of equity joint ventures," Open Access publications from Tilburg University urn:nbn:nl:ui:12-175839, Tilburg University.
- Anne T. Coughlan, 1985. "Competition and Cooperation in Marketing Channel Choice: Theory and Application," Marketing Science, INFORMS, vol. 4(2), pages 110-129.
- Lieberman, Marvin B, 1991. "Determinants of Vertical Integration: An Empirical Test," Journal of Industrial Economics, Wiley Blackwell, vol. 39(5), pages 451-66, September.
- Jill E. Hobbs, 1997. "Measuring the Importance of Transaction Costs in Cattle Marketing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1083-1095.
- Joskow, Paul L, 1985.
"Vertical Integration and Long-term Contracts: The Case of Coal-burning Electric Generating Plants,"
Journal of Law, Economics and Organization,
Oxford University Press, vol. 1(1), pages 33-80, Spring.
- Paul Joskow, 1984. "Vertical Integration and Long Term Contracts: The Case of Coal Burning Electric Generating Plants," Working papers 361, Massachusetts Institute of Technology (MIT), Department of Economics.
- George W. J. Hendrikse, 2007. "On the co-existence of spot and contract markets: the delivery requirement as contract externality," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 34(2), pages 257-282, June.
- Allen, Douglas W & Lueck, Dean, 1995. "Risk Preferences and the Economics of Contracts," American Economic Review, American Economic Association, vol. 85(2), pages 447-51, May.
- Allen, Douglas & Lueck, Dean, 1992. "Contract Choice in Modern Agriculture: Cash Rent versus Cropshare," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 397-426, October.
- Rachael E. Goodhue & Dale M. Heien & Hyunok Lee & Daniel A. Sumner, 2003.
"Contracts and Quality in the California Winegrape Industry,"
Review of Industrial Organization,
Springer, vol. 23(3_4), pages 267-282, December.
- Rachael Goodhue & Dale Heien & Hyunok Lee & Daniel Sumner, 2003. "Contracts and Quality in the California Winegrape Industry," Review of Industrial Organization, Springer, vol. 23(3), pages 267-282, December.
- Shelanski, Howard A & Klein, Peter G, 1995. "Empirical Research in Transaction Cost Economics: A Review and Assessment," Journal of Law, Economics and Organization, Oxford University Press, vol. 11(2), pages 335-61, October.
- Amemiya, Takeshi, 1984. "Tobit models: A survey," Journal of Econometrics, Elsevier, vol. 24(1-2), pages 3-61.
- Masten, Scott E, 1984. "The Organization of Production: Evidence from the Aerospace Industry," Journal of Law and Economics, University of Chicago Press, vol. 27(2), pages 403-17, October.
- Virginie Baritaux & Magali Aubert & Etienne Montaigne & Hervé Remaud, 2006.
"Matchmakers in wine marketing channels: The case of French wine brokers,"
John Wiley & Sons, Ltd., vol. 22(3), pages 375-390.
- Virginie Baritaux & Magali Aubert & Etienne Montaigne & Hervé Remaud, 2005. "Matchmakers in Wine Marketing Channels : The Case of French Wine Brokers," Industrial Organization 0512007, EconWPA.
- Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
- W. Coles, Jerilyn & Hesterly, William S., 1998. "The impact of firm-specific assets and the interaction of uncertainty: an examination of make or buy decisions in public and private hospitals," Journal of Economic Behavior & Organization, Elsevier, vol. 36(3), pages 383-409, August.
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 references are entirely missing, you can add them using this form.