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The evolution of the Dutch dairy industry and the rise of cooperatives: Combining transaction cost and evolutionary approaches

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  • Koen Frenken
  • Gerben van der Steege

Abstract

The thesis advanced in this paper holds that any transaction cost explanation of the diffusion of a particular organizational form requires an evolutionary analysis of differential performance of competing organizational forms over time. Using data on 1141 dairy factories in The Netherlands, we find evidence that cooperative factories performed significantly better than private factories, which can be explained by cooperatives’ lower transaction costs. However, superior performance is observed only in the Northern part, while cooperatives were more dominant in the Southern part. This suggests that entry conditions for cooperative factories in the South were more favourable than in the North.

Suggested Citation

  • Koen Frenken & Gerben van der Steege, 2006. "The evolution of the Dutch dairy industry and the rise of cooperatives: Combining transaction cost and evolutionary approaches," Papers in Evolutionary Economic Geography (PEEG) 0608, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jul 2006.
    • Handle: RePEc:egu:wpaper:0608
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    File URL: http://econ.geo.uu.nl/peeg/peeg0608.pdf
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    References listed on IDEAS

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    1. Klepper, Steven & Simons, Kenneth L, 1997. "Technological Extinctions of Industrial Firms: An Inquiry into Their Nature and Causes," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 6(2), pages 379-460, March.
    2. Richard Nelson, 1995. "Co-evolution of Industry Structure, Technology and Supporting Institutions, and the Making of Comparative Advantage," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 2(2), pages 171-184.
    3. Steven Klepper, 2002. "The capabilities of new firms and the evolution of the US automobile industry," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(4), pages 645-666, August.
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    Cited by:

    1. Eike W. Schamp, 2010. "On the Notion of Co-evolution in Economic Geography," Chapters, in: Ron Boschma & Ron Martin (ed.), The Handbook of Evolutionary Economic Geography, chapter 20, Edward Elgar Publishing.

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    More about this item

    Keywords

    transaction cost economics; survival analysis; industry lifecycle; dairy industry; cooperatives;
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