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
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: Suggested Citation