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More Trust Instead of More Vertical Integration in the German Pork Production? Empirical Evidence and Theoretical Considerations

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  • Schulze, Birgit
  • Spiller, Achim
  • Theuvsen, Ludwig
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    Abstract

    It is often hypothesized that contracts and vertical integration are paramount for the future competitiveness of meat supply chains. In this paper we review empirical evidence and theoretical reflections underlying this argumentation. We confront the contract and integration hypothesis with transaction cost considerations taking into account current technological and institutional developments and results from a survey in German pig production. It is concluded that more trust and commitment in non-contractual long-term relationships may be a viable alternative to stricter vertical coordination in meat supply chains.

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    File URL: http://purl.umn.edu/7756
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    Bibliographic Info

    Paper provided by European Association of Agricultural Economists in its series 99th Seminar, February 8-10, 2006, Bonn, Germany with number 7756.

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    Date of creation: 2006
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    Handle: RePEc:ags:eaae99:7756

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    Keywords: pig-pork-chain; transaction cost economics; supplier relationship management; Agribusiness; Institutional and Behavioral Economics; Livestock Production/Industries;

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    1. Martinez, Stephen W., 2002. "Vertical Coordination Of Marketing Systems: Lessons From The Poultry, Egg, And Pork Industries," Agricultural Economics Reports 34051, United States Department of Agriculture, Economic Research Service.
    2. Brian Roe & Thomas L. Sporleder & Betsy Belleville, 2004. "Hog Producer Preferences for Marketing Contract Attributes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 115-123.
    3. Peterson, H. Christopher & Wysocki, Allen F., 1998. "Strategic Choice Along The Vertical Coordination Continuum," Staff Papers 11651, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    4. M. den Ouden & Aalt A. Dijkhuizen & Ruud B.M. Huirne & Peter J.P. Zuurbier, 1996. "Vertical cooperation in agricultural production-marketing chains, with special reference to product differentiation in pork," Agribusiness, John Wiley & Sons, Ltd., vol. 12(3), pages 277-290.
    5. Peter Bogetoft & Henrik Ballebye Olesen, 2002. "Ten rules of thumb in contract design: lessons from Danish agriculture," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 29(2), pages 185-204, June.
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