An organizational economics approach to the existence of sharecropping

Jiancai Pi

Agricultural Economics, 2013, vol. 59, issue 11, 537-541

Abstract: The paper provides a new explanation for the existence of sharecropping in agriculture from the perspective of organizational economics. Similar to a multinational enterprise's decision of whether to enter a joint venture or to choose a wholly owned subsidiary, we can see sharecropping as a joint venture and a fixed rent contract as a wholly owned subsidiary when we stand in the tenant's position. Our analysis shows that when the landlord has a strong enough comparative advantage in exerting one type of effort, he/she tends to choose the share contract.

Keywords: share contract; fixed rent contract; bargaining power (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:59:y:2013:i:11:id:127-2012-agricecon

DOI: 10.17221/127/2012-AGRICECON

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