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Quality and governance mode choice: a transaction cost approach to the wine industry

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  • Fernandez-Olmos, Marta
  • Rosell-Martinez, Jorge
  • Espitia-Escuer, Manuel Antonio

Abstract

We analyze the relationship between product quality and governance mode choice using the results of a survey of DOC Rioja wineries. Wineries that produce high-quality wines are more likely to vertically integrate than are wineries that produce low-quality wines. Consistent with Transaction Cost Economics, we find evidence that asset specificity and uncertainty are important determinants of vertical integration. Finally, the size of the winery is also an important factor that affects governance mode choice in viticulture.

Suggested Citation

  • Fernandez-Olmos, Marta & Rosell-Martinez, Jorge & Espitia-Escuer, Manuel Antonio, 2008. "Quality and governance mode choice: a transaction cost approach to the wine industry," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44266, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae08:44266
    DOI: 10.22004/ag.econ.44266
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    References listed on IDEAS

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    Cited by:

    1. Fabio R. Chaddad & Jason R.V. Franken & Miguel I. Gómez & R. Brent Ross, 2017. "Coordination of Winegrape Supply Chains in Emerging Markets," Agribusiness, John Wiley & Sons, Ltd., vol. 33(3), pages 289-301, June.
    2. Franken, Jason R. V. & Bacon, Kevin J., 2014. "Organizational Structure and Operation of the Illinois Wine Industry," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 43(1), pages 1-21, April.

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