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    Markets, Contracts, or Integration? The Adoption, Diffusion, and Evolution of Organizational Form

    James, Harvey S. (Harvey Stanley)
    Klein, Peter G.
    Sykuta, Michael E.
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    [PDF] MarketsContractsIntegrationAdoptionDiffusionEvolutionOrganizationalForm.pdf (102.3Kb)
    Date
    2007-04
    Format
    Working Paper
    Metadata
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    Abstract
    The rise of contract farming and vertical integration is one of the most important changes in modern agriculture. Yet the adoption and diffusion of these new forms of organization has varied widely across regions, commodities, and farm types. Transaction cost and other modern theories of the firm help explain the advantages of contracting and integration over reliance on spot markets and commodity brokers. However, these theories do not address the variation in adoption rates of new organizational forms. This paper lays out a more dynamic framework for understanding the evolution of organizational practices in U.S. agriculture, drawing on theories of the diffusion of technology and organizational complementarities. Using recent trends as stylized facts we argue that the agrifood sector is characterized by strong complementarities and that identifying and describing these complementarities more fully sheds considerable light on the organizational structure of agricultural production. We illustrate our arguments with case studies from the oilseed, poultry, and hog industries.
    URI
    http://hdl.handle.net/10355/8910
    Rights
    OpenAccess.
    This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 License.
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    • Contracting and Organizations Research Institute publications (MU)

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