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Contract enforcement in Hungarian agri-food chain: the case of small and medium enterprises

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  • Ferto, Imre

Abstract

The paper analyses small and medium firms’ perceptions on contract enforcement along food chain in central region of Hungary using survey data. We find that 59 per cent of respondents believe that they could use court to enforce contracts with their partner. However we do not find significant differences along food chain. Our estimations suggest that contractual specificity and firm attributes, external linkages, efficiency of legal systems factors, buyer and seller specific factors significantly influence the opinion on contract enforcement. Interestingly, the impact of branch specific characteristics has no impacts. Acceptance of financial loss can be explained by contractual specificity, external linkages, and efficiency of legal systems. Buyer, seller and industry characteristics has not played role in the explanation of financial losses.

Suggested Citation

  • Ferto, Imre, 2012. "Contract enforcement in Hungarian agri-food chain: the case of small and medium enterprises," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 134956, Agricultural Economics Society.
  • Handle: RePEc:ags:aesc12:134956
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    File URL: http://purl.umn.edu/134956
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    References listed on IDEAS

    as
    1. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-1158, December.
    2. Beckmann, Volker & Boger, Silke, 2004. "Courts and contract enforcement in transition agriculture: theory and evidence from Poland," Agricultural Economics, Blackwell, pages 251-263.
    3. Kristine Van Herck & Nivelin Noev & Johan F.M. Swinnen, 2012. "Institutions, exchange and firm growth: evidence from Bulgarian agriculture," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 39(1), pages 29-50, February.
    4. Jema Haji, 2010. "The Enforcement of Traditional Vegetable Marketing Contracts in the Eastern and Central Parts of Ethiopia," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 19(5), pages 768-792, November.
    5. Azeta Cungu & Hamish Gow & Johan F. M. Swinnen & Liesbet Vranken, 2008. "Investment with weak contract enforcement: evidence from Hungary during transition," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 35(1), pages 75-91, March.
    6. Telser, L G, 1980. "A Theory of Self-enforcing Agreements," The Journal of Business, University of Chicago Press, vol. 53(1), pages 27-44, January.
    7. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-641, August.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Agribusiness; D2; Q13;

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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