Outsourcing Decisions Of Pig Producers In Baden-Württemberg
The global trend of industrializing agriculture increasingly transforms farms and firms into specialized component suppliers within a multi-stage food processing chain, which creates intraindustry trade between- and within geographical regions. This can be analyzed within the framework of a hypothetical multiregional food-processing firm that benefits from outsourcing of various ‘tasks’ to other sub-contracting regions, in order to utilize lower production cost there. This paper demonstrates how this can be modeled as a multi-output cost minimization problem of the processing firm, and it is argued that with respect to agriculture, the outsourcing opportunities for the firm are determined by economies of diversification. Trade is implicitly reflected as the movement of intermediate factors towards the processing firm, and firm-level specialization of the sub-contractors is an observable outcome. This framework is applied to pig production in 1155 municipalities in southern Germany that can be interpreted as ‘almost firm-level’ data. The estimated multi-output production frontier is decomposed according to a primal measure of diversification economies. Results show that pig farms located closer to slaughterhouses tend to specialize more in one of the tasks ‘piglet production’, ‘rearing’ or ‘fattening’, while farms in regions distant from slaughterhouses tend to insource all of these tasks. Future research may extend the framework towards comparative static analyses of relevant policies.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 0531 / 596 5501
Fax: 0531 / 596 5599
Web page: http://www.gewisola.de/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Reardon, Thomas & Barrett, Christopher B., 2000.
"Agroindustrialization, globalization, and international development An overview of issues, patterns, and determinants,"
Agricultural Economics of Agricultural Economists,
International Association of Agricultural Economists, vol. 23(3), September.
- Reardon, Thomas & Barrett, Christopher B., 2000. "Agroindustrialization, globalization, and international development: An overview of issues, patterns, and determinants," Agricultural Economics, Blackwell, vol. 23(3), pages 195-205, September.
- Chavas, Jean-Paul & Kim, Kwansoo, 2010. "Economies of diversification: A generalization and decomposition of economies of scope," International Journal of Production Economics, Elsevier, vol. 126(2), pages 229-235, August.
- Rosario Crin�, 2009. "Offshoring, Multinationals And Labour Market: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 197-249, 04.
- Philipp Harms & Oliver Lorz & Dieter Urban, 2012.
"Offshoring along the production chain,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 45(1), pages 93-106, February.
- Philipp Harms & Oliver Lorz & Dieter M. Urban, 2009. "Offshoring along the Production Chain," CESifo Working Paper Series 2564, CESifo Group Munich.
- Philipp Harms & Oliver Lorz & Dieter Urban, 2009. "Offshoring Along the Production Chain," Working Papers 09.01, Swiss National Bank, Study Center Gerzensee.
- Marie-Luise Rau & Frank van Tongeren, 2009.
"Heterogeneous firms and homogenising standards in agri-food trade: the Polish meat case,"
European Review of Agricultural Economics,
Foundation for the European Review of Agricultural Economics, vol. 36(4), pages 479-505, December.
- Frank VAN TONGEREN & Marie-Luise RAU, . "Heterogeneous Firms and Homogenising Standards in Agri-Food Trade - the Polish Meat Case," EcoMod2008 23800149, EcoMod.
- Nikolaev, Denis, 2007. "The reasons of creation and development of holding agro industrial structures in system of vertical integration sugar business in Russia," 102nd Seminar, May 17-18, 2007, Moscow, Russia 10015, European Association of Agricultural Economists.
- Gene M. Grossman & Esteban Rossi-Hansberg, 2008.
"Trading Tasks: A Simple Theory of Offshoring,"
American Economic Review,
American Economic Association, vol. 98(5), pages 1978-97, December.
- Jean-Paul Chavas, 2008.
"On the economics of agricultural production ,"
Australian Journal of Agricultural and Resource Economics,
Australian Agricultural and Resource Economics Society, vol. 52(4), pages 365-380, December.
- Chavas, Jean-Paul, . "On the economics of agricultural production," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society.
- Richard Baldwin & Frédéric Robert-Nicoud, 2013.
"Trade-in-goods and trade-in-tasks: An integrating framework,"
Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva
13103, Institut d'Economie et Econométrie, Université de Genève.
- Baldwin, Richard & Robert-Nicoud, Frédéric, 2014. "Trade-in-goods and trade-in-tasks: An integrating framework," Journal of International Economics, Elsevier, vol. 92(1), pages 51-62.
- Richard Baldwin & Frédéric Robert-Nicoud, 2010. "Trade-in-goods and trade-in-tasks: An Integrating Framework," NBER Working Papers 15882, National Bureau of Economic Research, Inc.
- Baldwin, Richard & Robert-Nicoud, Frédéric, 2010. "Trade-in-goods and trade-in-tasks: An Integrating Framework," CEPR Discussion Papers 7775, C.E.P.R. Discussion Papers.
- Elhanan Helpman, 2006.
"Trade, FDI, and the Organization of Firms,"
Harvard Institute of Economic Research Working Papers
2118, Harvard - Institute of Economic Research.
- Melitz, Marc J, 2002.
"The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity,"
CEPR Discussion Papers
3381, C.E.P.R. Discussion Papers.
- Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
- Mark J. Melitz, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," NBER Working Papers 8881, National Bureau of Economic Research, Inc.
- Maureen Kilkenny, 2002.
"The New Rural Economy: Discussion,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 84(5), pages 1253-1255.
- Evan Rawley & Timothy S. Simcoe, 2010. "Diversification, Diseconomies of Scope, and Vertical Contracting: Evidence from the Taxicab Industry," Management Science, INFORMS, vol. 56(9), pages 1534-1550, September.
- Greenaway, David & Gullstrand, Joakim & Kneller, Richard, 2008. "Surviving globalisation," Journal of International Economics, Elsevier, vol. 74(2), pages 264-277, March.
When requesting a correction, please mention this item's handle: RePEc:ags:gewi11:114509. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.