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Factors Influencing Organizational Structure In The Food Manufacturing, Chemical, Agricultural Wholesaling And Biotechnology Industries

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  • Maude Roucan-Kane

    () (IƱaki Pena
    Michael Boehlje
    Jay Akridge)

Abstract

The objective of this study is to identify factors determining a business investment strategy (i.e., the choice of investment commitment and form of organizational structure) in the food manufacturing, chemical, agricultural wholesaling and biotechnology industries. Propositions regarding strategic alliance theories are tested on over 400 inter-firm collaborative agreements using secondary data from major US and European companies for the 1994-97 period. Results suggest that transactions with lower technological and resource uncertainty levels are more likely to result in investments with a higher commitment level (i.e., acquisitions or majority equity-based controlling investments). The investment commitment level embedded in a single business transaction seems to be affected not only by a goal of cost minimization, but also by strategic motives and firm and industry factors.

Suggested Citation

  • Maude Roucan-Kane, 2009. "Factors Influencing Organizational Structure In The Food Manufacturing, Chemical, Agricultural Wholesaling And Biotechnology Industries," Working Papers 09-01, Purdue University, College of Agriculture, Department of Agricultural Economics.
  • Handle: RePEc:pae:wpaper:09-01
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    References listed on IDEAS

    as
    1. Fernandez-Cornejo, Jorge, 2004. "The Seed Industry In U.S. Agriculture: An Exploration Of Data And Information On Crop Seed Markets, Regulation, Industry Structure, And Research And Development," Agricultural Information Bulletins 33671, United States Department of Agriculture, Economic Research Service.
    2. Pisano, Gary P, 1989. "Using Equity Participation to Support Exchange: Evidence from the Biotechnology Industry," Journal of Law, Economics, and Organization, Oxford University Press, vol. 5(1), pages 109-126, Spring.
    Full references (including those not matched with items on IDEAS)

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    Keywords

    Transaction costs; strategic alliances; food manufacturing; chemical; agricultural wholesaling; ag-biotechnology; investment strategy; innovation;

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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