An Analysis of Vertical Coordination in Agri-Business

Hoguen Chung

Journal of Rural Development/Nongchon-Gyeongje, 2006, vol. 29, issue 2

Abstract: There are various types of vertical coordinations in value chain. They are spot market, specification contract, relation based alliance, equity based alliance, and vertical integration. The characteristic of each type is explained and then compared each other. Varying with asset specificity, a process of deciding the type of vertical coordination is explained using technical efficiency and agency efficiency. Technical efficiency is related to production cost and economy of scale and agency efficiency is related with transaction cost and agency problem. The study presents empirical cases of vertical coordination by Doderam, a co-operative of porks and Halim, a company to raise, process, and marketing chicken. Relations of them with farmers are analyzed and suggestions are followed.

Keywords: Demand; and; Price; Analysis (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:ags:jordng:288394

DOI: 10.22004/ag.econ.288394

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