Transactions, transaction costs, and vertical integration: a re-examination

1992 ◽  
Vol 4 (3) ◽  
pp. 291-316 ◽  
Author(s):  
Steven G. Medema
Keyword(s):  
Transaction Costs ◽  
Vertical Integration

Agricultural Co-operatives

2017 ◽  
Author(s):  
Samira Nuhanovic-Ribic ◽  
Ermanno C. Tortia ◽  
Vladislav Valentinov
Keyword(s):  
Developing Countries ◽  
Transaction Costs ◽  
Vertical Integration ◽  
Large Scale ◽  
Scale Production ◽  
Economic Literature ◽  
Economic Independence ◽  
Large Scale Production ◽  
Entrepreneurial Action

Over the last decades, agricultural co-operatives grew substantially in most developed and developing countries, often reaching dominant market positions. We inquire into the economic mechanism behind this growth, by elaborating on the relation between co-operative identity and co-operative benefits. We highlight the ability of agricultural co-operatives to co-ordinate large-scale production, to monitor work contributions and product quality, and to ensure economic independence of farmer members. Following the two principal streams in the economic literature, we distinguish between the conceptions of agricultural co-operatives as units of vertical integration and as firms characterized by common governance of collective entrepreneurial action and ability to reduce transaction costs and economic risk. We describe the financial and governance limitations of agricultural co-operatives while taking account of new co-operative models presenting institutional tools introduced to overcome these limitations. We conclude by suggesting directions for enhancing the role of co-operatives in agricultural and rural development.

scholarly journals VERTICAL INTEGRATION in AGRO-INDUSTRY: ECO-FRIENDLY GAMBIER PRODUCTS

2021 ◽  
Vol 10 (4) ◽  
pp. 9-17
Author(s):  
Hamira Hamira ◽  
◽  
Bernadette Robiani ◽  
Mukhlis Mukhlis ◽  
◽  
...  
Keyword(s):  
Environmental Pollution ◽  
Transaction Costs ◽  
Vertical Integration ◽  
Raw Materials ◽  
Garment Industry ◽  
Added Value ◽  
Primary Data ◽  
Economic Activities ◽  
Cost Component ◽  
The Impact

Textile dyeing on fabrics and clothing causes environmental pollution and health problems. There is an innovation of natural coloring using gambier in the Gambo Muba fabric industry and the garment industry in Indonesia. Gambier farmers supply natural dye raw materials. Then through the supply chain of the Gambo Muba fabric industry and the garment industry, it causes vertical integration in the gambier agro-industry. This study uses primary data from 39 vertically integrated companies in the gambier agro-industry, including the gambier rubber industry, the Gambo Muba fabric industry, and the garment industry. The data was then analyzed using descriptive qualitative. This study analyzes the relationship between vertically integrated industries, including the transaction costs between them, their impact of vertical integration on added value, and their profitability. Vertically integrated industries have low transaction costs. The impact of vertical integration on the gambier agro-industry adds to the chain of economic activities that can increase added value and profits. The impact of vertical integration can reduce transaction costs, especially the supplier coordination cost component, distributor cost component, inter-company lobbying costs components. The benefits of vertical integration in the gambier agro-industry are increasing high added value, profit levels, decreasing environmental pollution, and agro-industry sustainability.

Broadband and Structural Separation from the Perspective of Transaction Cost Economics

2011 ◽  
pp. 73-91
Author(s):  
Hidenori Fuke
Keyword(s):  
Transaction Costs ◽  
Transaction Cost ◽  
Vertical Integration ◽  
Transaction Cost Economics ◽  
Telecommunications Industry ◽  
Costs And Benefits ◽  
Efficient Management ◽  
Balance Analysis ◽  
Broadband Market ◽  
Structural Separation

Conduct regulation and structural separation are often discussed in industrial organisation studies as options to prevent the abuse of market power by vertically integrated firms toward the downstream market. Both the structural separation of NTT and conduct regulation have been discussed in the Japanese telecommunications industry since the introduction of competition in 1985 and the issue is still being discussed, although the industry is going through a transition from POTS (Plain Old Telephone Service) to the broadband internet. Past discussions have been inclined toward elimination of the harmful effects of vertical integration. However, there is a benefit of vertical integration in the sense that it will promote the efficient management of the firm concerned. I will present a new contention that it is important to conclude a balanced analysis of costs and benefits of vertical integration based on transaction cost theory. Structural separation in the broadband market entails significant transaction costs between a carrier with access facilities and firms offering broadband services by renting these facilities as input. These kinds of transaction costs are comparatively negligible in POTS. I will make it clear that the balance analysis of costs and benefits of structural separation has become more important in broadband than in POTS based on the actual differences in network structure.

Study on Solar Photovoltaic Industry Chain Vertical Integration Investment Decisions

2013 ◽  
Vol 805-806 ◽  
pp. 7-11
Author(s):  
Rong Sheng Chen ◽  
Min Liu
Keyword(s):  
Decision Making ◽  
Transaction Costs ◽  
Vertical Integration ◽  
Investment Decisions ◽  
Economies Of Scope ◽  
Solar Photovoltaic ◽  
Industry Chain ◽  
Manufacturing Enterprises ◽  
Competition Effects ◽  
Decision Making Behavior

Five reasons for vertical integration investment are reduction in transaction costs, access to economies of scope, and reduction in risks and damage, upgrading of competitive advantage and strategic profits. Some upstream photovoltaic manufacturing enterprises through analyzing their decision-making behavior for vertical integration of PV industry draw a conclusion that if they invest in their lower counterparts, their vertical integration behavior will come to two effects: competition effects and cooperation effect.

The Rise of Specialist Firms in Spanish Shipping and Their Strategies of Growth, 1860 to 1930

2000 ◽  
Vol 74 (2) ◽  
pp. 267-300 ◽  
Author(s):  
Jesús Ma Valdaliso
Keyword(s):  
Nineteenth Century ◽  
Social Networks ◽  
Twentieth Century ◽  
Organizational Structure ◽  
Transaction Costs ◽  
Vertical Integration ◽  
Capital Requirements ◽  
Maritime Transport ◽  
Increasing Demand

Spanish shipping firms relied on various strategies to direct the growth of their industry from 1860 to 1930. The diffusion of specialist shipowners during the second half of the nineteenth century was the result of both an increasing demand for maritime transport and a heavy rise in capital requirements owing to improvements in technology. During the first third of the twentieth century, some of these specialized firms became large companies through internal growth and/or horizontal combination. They achieved their gains without resorting to formal vertical integration, choosing instead to build social networks with other shipowners based on trust and loyalty. This approach allowed them to create intermediate arrangements, thereby diminishing transaction costs. When strategies of formal vertical integration were adopted, they primarily involved activities similar to shipping, such as ship brokering, consignment, stevedoring, and other maritime services. To document these trends, this article analyzes the organizational structure of Spain's twenty largest shipping concerns.

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