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European Review of Agriculture Economics Vol 28 (3) (2001) pp.241-262
© 2001 Oxford University Press and the Foundation for the European Review of Agricultural Economics

Quality and contractual choice: a transaction cost approach to the polish hog market

Silke Boger

Humboldt University of Berlin, Berlin, Germany

Summary

This paper analyses the marketing arrangements between Polish hog producers and buyers at a time when high-quality markets are emerging. Interrelationships between four key factors are investigated: governance structures, prices, grading and investment in quality production. A sample of 200 Polish hog producers is analysed. A multinomial logit analysis indicates that producers' choice between large processors as opposed to traders and local slaughterhouses can be predicted by type of contract, grading and quality. A cluster analysis reveals four distinct groups of farmers according to investment in specific assets, ability to safeguard assets, degree of coordination with buyers, use of grading and written contracts, and extent of bargaining power.

Keywords: transaction costs, product quality, Poland, market evolution, economic transition


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