Premium
Ownership Structure in Agrifood Chains: The Marketing Cooperative
Author(s) -
Hendrikse George,
Bijman Jos
Publication year - 2002
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/1467-8276.00246
Subject(s) - business , production (economics) , supply chain , industrial organization , distribution (mathematics) , product (mathematics) , perspective (graphical) , marketing , commerce , microeconomics , economics , mathematical analysis , geometry , mathematics , artificial intelligence , computer science
Globalization, technological developments, and consumer concerns press farmers and food producers to enhance product innovation and to seek more efficient production and distribution structures. These changes in agrifood markets shift the relative importance of the investments by different chain partners. It may therefore be necessary to change the allocation of ownership of essential assets to induce agents to make those investments that generate the chain optimum. This article analyzes the impact of ownership structure on investments in a three‐tier supply chain from an incomplete contracting perspective. Circumstances are determined in which a marketing cooperative is the unique first‐best ownership structure.