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Rent Sharing in Multi-Site Hog Production


  • Brian P. Cozzarin
  • Randall E. Westgren


A firm-level model of three-site hog production is used compare a franchise organizational structure to a three-firm alliance. The results of the simulations imply that the franchise system is better equipped to mitigate underproduction in the nursery and finishing units, the nursery and finishing units lose relatively more profit than they otherwise would in an alliance. The pig-space guatantee does little to offset the financial risk for the nursery and finishing units when underproduction occurs upstream (breeding, gestation, and farrowing unit). Copyright 2000, Oxford University Press.

Suggested Citation

  • Brian P. Cozzarin & Randall E. Westgren, 2000. "Rent Sharing in Multi-Site Hog Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(1), pages 25-37.
  • Handle: RePEc:oup:ajagec:v:82:y:2000:i:1:p:25-37

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    Cited by:

    1. Franken, Jason R.V. & Pennings, Joost M.E. & Garcia, Philip, 2009. "Do Transaction Costs and Risk Preferences Influence Marketing Arrangements in the Illinois Hog Industry?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(2), August.
    2. Herath, Deepananda P.B. & Weersink, Alfons, 2003. "Vertical Coordination Changes In The Sri Lankan Tea Industry:Transaction, Management, And Production Costs," 2003 Annual meeting, July 27-30, Montreal, Canada 21941, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Cozzarin, Brian P. & Westgren, Randall E., 2000. "Rent Sharing Mechanisms In Production Alliances," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 3(03).
    4. Franken, Jason R.V. & Parcell, Joseph L. & Patterson, David J. & Smith, Michael F. & Poock, Scott, . "Cow-Calf Producer Interest in Retained Ownership," Journal of Agribusiness, Agricultural Economics Association of Georgia.
    5. Franken, Jason R.V. & Pennings, Joost M.E., 2005. "Changing Agricultural Marketing Channel Structures: Interdependences & Risk Preferences," 2005 Annual meeting, July 24-27, Providence, RI 19414, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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