Stability and Diffusion of Vertical Arrangements of Production: A Theoretical Contribution

Revista Economia e Sociedade, Vol. 11, No. 2, p. 19, July-December 2002

Posted: 22 Sep 2003

See all articles by Decio Zylbersztajn

Decio Zylbersztajn

University of São Paulo (USP) - Department of Administration

Antonio Carlos Lima Nogueira

Faculdade de Tecnologia de São Paulo

Abstract

The objective of this study is to contribute for the theoretical development of vertical coordination in productive systems, shaping the concept of 'stability and diffusion of contractual arrangements'. Considering the well-accepted statement of efficient alignment between transaction characteristics and contractual arrangement, more efficient arrangements are expected to diffuse and replace less efficient ones. This process can be described by a logistic curve along the time, with potential application for designing strategic alliances in food chains. The coexistence of alternative contractual arrangements is a puzzle in the literature that stresses the efficient alignment and can be explained by: (1) disequilibrium situations, (2) barriers for adoption of new and superior contractual architectures due to non replicable routines and (3) effect of institutional environment on the level of adoption of a specific arrangement. The concept is exemplified by the poultry production system in Brazil, stressing its usefulness for the study of cooperative strategies in food chains and suggesting further empirical studies.

Keywords: Stability of contractual arrangements, diffusion of contractual arrangements, vertical coordination

JEL Classification: L22, L23

Suggested Citation

Zylbersztajn, Decio and Nogueira, Antonio Carlos Lima, Stability and Diffusion of Vertical Arrangements of Production: A Theoretical Contribution. Revista Economia e Sociedade, Vol. 11, No. 2, p. 19, July-December 2002, Available at SSRN: https://ssrn.com/abstract=416901

Decio Zylbersztajn (Contact Author)

University of São Paulo (USP) - Department of Administration ( email )

Av. Prof. Luciano Gualberto
908 - Predio 1 Sala C14
Sao Paulo 05508-900
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55-11-3032-5966 (Fax)

Antonio Carlos Lima Nogueira

Faculdade de Tecnologia de São Paulo ( email )

Praça Coronel Fernando Prestes, 30
Bom Retiro
Sao Paulo, 01124-060
Brazil
55 11 3322-2200 (Phone)

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