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Quality and Inclusion of Producers in Value Chains: A Theoretical Note
Author(s) -
Vandemoortele Thijs,
Rozelle Scott,
Swinnen Johan,
Xiang Tao
Publication year - 2012
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/j.1467-9361.2011.00649.x
Subject(s) - transaction cost , production (economics) , quality (philosophy) , economics , value (mathematics) , capital (architecture) , database transaction , factors of production , affect (linguistics) , inclusion (mineral) , microeconomics , developing country , industrial organization , economic growth , gender studies , philosophy , linguistics , archaeology , epistemology , machine learning , sociology , computer science , programming language , history
Abstract This paper develops a formal theory of the endogenous process of the introduction of high quality production in developing countries. Initial differences in income and capital and transaction costs are shown to affect the emergence of and the size of the high quality economy. Initial differences in the production structure and the nature of transaction costs—as well as the possibility of contracting between producers and processors—are shown to determine which producers are included in the high quality economy, and which not.