Markets, Contracts, or Integration? The Adoption, Diffusion, and Evolution of Organizational Form
AbstractThe rise of contract farming and vertical integration is one of the most important changes in modern agriculture. Yet the adoption and diffusion of these new forms of organization has varied widely across regions, commodities, or farm types, however. Transaction cost theories and the like are not fully effective at explaining the variation of adoption rates of different organizational forms, in part because of their inherent static nature. In order to explain the adoption, diffusion and evolution of organizational form, a more dynamic framework is required. This paper lays out such a framework for understanding the evolution of organizational practices in U.S. agriculture by drawing on existing theories of economic organization, the diffusion of technological innovation, and organizational complementarities. Using recent trends as stylized facts we argue that the agrifood sector is characterized by strong complementarities among its constituent features and that these complementarities help explain the stylized facts. We also discuss several testable hypotheses concerning changes in organizational form in agriculture.
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Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2005 Annual meeting, July 24-27, Providence, RI with number 19390.
Date of creation: 2005
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contracting; vertical integration; organizational innovation; diffusion; Institutional and Behavioral Economics; L14; L22; Q13; O33;
Find related papers by JEL classification:
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
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