Research Reports
An Analysis of Vertical Coordination in Agri-business
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AuthorChung, Hoguen
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Publication Date2005.12.01
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Original
There are various types of vertical coordinations in value chain. They are spot market, specification contract, relation based alliance, equity based alliance, and vertical integration. The characteristic of each type is explained and then compared each other. Varying with asset specificity, a process of deciding the type of vertical coordination is explained using technical efficiency and agency efficiency. Technical efficiency is related to production cost and economy of scale and agency efficiency is related with transaction cost and agency problem. Core competence and tacit knowledge are introduced as major components for successful strategic innovation in dynamic market. The study briefly presents empirical cases of vertical coordination by Doderam, a co-operative and Halim, a company to raise, process, and marketing porks and chicken.
Researchers: Hogun Chong
E-mail address: hogunc@krei.re.kr
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