Author: M. Brem 1
View More View Less
  • 1 Wertingerstr. 40, 86368 Hirblingen, Germany. E-mail: markus.brem@gmx.de
Restricted access

Purchase article

USD  $25.00

1 year subscription (Individual Only)

USD  $700.00

This article seeks to contribute to our understanding of farm restructuring in transition by trying to identify driving forces behind organisational change in agriculture. It focuses on the stakeholders’ trade-off between internal transaction costs and switching costs. The article introduces factors determining the level of these two types of costs, such as the original size of the firm, inside-ownership and the type of production for internal transaction costs, and the remaining asset specificity after establishing the formal property rights for switching costs. The theoretical model is tested by data from a recent survey in two regions of the Czech Republic with both qualitative and quantitative analysis. The quantitative analysis characterises the downsizing process of distinguishable restructuring paths of 87 farms. Mechanisms of individual stakeholders’ redeployment decisions are elaborated on the basis of five qualitative case studies. The article shows perspectives of further farm restructuring in European transition countries.

  • Adams, J. (1994): Economy as Institutional Process: Change, Transformation and Progress. Journal of Economic Issues, 18(2): 331355.

  • Alchian, A. A. (1950): Uncertainty, Evolution and Economic Theory. Journal of Political Economy, 58(3): 211221.

  • Allen, D. W. (1991): What are Transaction Costs? Research in Law and Economics, 14: 118.

  • Allen, D. W. and Lueck, D. (1998): The Nature of the Farm. Journal of Law & Economics, 41: 343386.

  • Balmann, A. (1996): Pfadabhängigkeiten in Agrarstrukturentwicklungen. Berlin: Duncker & Humblot.

  • Balmann, A., Czasch, B. and Odening, M. (2000): Employment and Efficiency of Farms in Transition — an Empirical Analysis of Brandenburg. Paper presented on the XXIVth International Conference of Agricultural Economists in Berlin, August 13–20, 2000.

    • Search Google Scholar
    • Export Citation
  • Barzel, Y. (1997): Economic Analysis of Property Rights. Cambridge: Cambridge University Press.

  • Beckmann, V. (ed.) (2000): Transaktionskosten und institutionelle Wahl in der Landwirtschaft — zwischen Markt, Hierarchie und Kooperation. Berliner Schriftenreihe zur Kooperationsforschung, Vol., 5, Institut für Genossenschaftswesen, Berlin.

    • Search Google Scholar
    • Export Citation
  • Ben-Ner, A. and Putterman, L. (1998): Values and Institutions in Economic Analysis. In: Ben-Ner, A. and Putterman L. (eds): Economics, Values and Organization. Cambridge: Cambridge University Press.

    • Search Google Scholar
    • Export Citation
  • Bezemer, D. J. (1999): Governance, Risk and Structural Change in Central and European Agriculture. Working Paper, University of Amsterdam and Tinbergen Institute, The Netherlands.

    • Search Google Scholar
    • Export Citation
  • Braguinsky, S. and Yavlinsky, G. (2000): Incentives and Institutions. Princeton: Princeton University Press.

  • Brem, M. (2001): Landwirtschaftliche Unternehmen im Transformationsprozess. Aachen: Shaker-Verlag.

  • Brem, M. and Kim, J. M. (2000): A Status of Agricultural Producer Cooperatives in East European Countries. Korean Journal of International Agriculture, 12 (3), 238256.

    • Search Google Scholar
    • Export Citation
  • Brem, M. and Allen D. W. (2000): Restructuring Large-Scale Farms and the Exit Problem. Paper presented at the XXIVth Conference of the International Association of Agricultural Economics, Berlin, 13–18 August 2000.

    • Search Google Scholar
    • Export Citation
  • Cappelle-Konijnenberg, J. v. (1995): Restructuring, Firm Performance and Control Mechanisms. Working Paper at the Department of Business Administration, Tilburg University, The Netherlands.

    • Search Google Scholar
    • Export Citation
  • Carlin, W., Reenen, J. v. and Wolfe, T. (1995): Enterprise Restructuring in Early Transition: the Case Study Evidence from Central and Eastern Europe. Economics of Transition, 3(4): 427458.

    • Search Google Scholar
    • Export Citation
  • Cheung, S. N. S. (1970): The Structure of a Contract and the Theory of a Non-exclusive Resource. Journal of Law & Economics, 49: 4970.

    • Search Google Scholar
    • Export Citation
  • Coase, R. H. (1937): The Nature of the Firm. Economica, 4: 386405 Reprint in: Buckley, P. J. and Michie, J. (eds) (1996): Firms, Organizations and Contracts. New York: Oxford University Press.

    • Search Google Scholar
    • Export Citation
  • Csáki, Cs. and Lerman, Z. (1997): Land Reform and Farm Restructuring in East Central Europe and CIS in the 1990s: Expectations and achievements after the first five years. European Review of Agricultural Economics, 24: 428452.

    • Search Google Scholar
    • Export Citation
  • CSU (Czech Statistical Office, 1995). Agrocensus 1995 — cast I–III. Prague.

  • Dietrich, M. (1997): Strategic Lock-in as a Human Issue: The Role of Professional Orientation. In: Magnusson, L. and Ottosson, J. (eds): Evolutionary Economics and Path Dependence. Cheltenham: Edward Elgar.

    • Search Google Scholar
    • Export Citation
  • Doucha, T. and Jurica, A. (1998): Farm Structure and Farm Managers in Transition Period — a Case of the Czech Republic. Handout on the FAO-conference on agricultural transition in CEEC in Oct. 1998, Prague.

    • Search Google Scholar
    • Export Citation
  • Falaschetti, D. (1999): Golden Parachutes: Credible Commitments or Evidence of Shirking? Working Paper of the Department of Economics, Washington University, USA.

    • Search Google Scholar
    • Export Citation
  • Field, B. C. (1989): The Evolution of Property Rights. Kyklos, 42(3): 33193345.

  • Filip, J. (1994) : Entwicklungstendenzen der Agrarstrukturen in der Tschechischen und der Slowakischen Republik. Berlin: Duncker & Humblot.

    • Search Google Scholar
    • Export Citation
  • Flick, U. (1995): Qualitative Forschung. Hamburg: Rowolt Taschenbuch Verlag.

  • Foss, K. and Foss, N. (2001): Assets, Attributes, and Ownership. International Journal of the Economics of Business, 8(1): 1937.

  • Fukuyama, F. (1995): Trust. New York: Penguin Group.

  • Hagedorn, K. (1996): Das Institutionenproblem in der Agrarökonomischen Politikforschung. Tübingen: J. C. B. Mohr.

  • Jensen, M. C. and Meckling, W. H. (1996): Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. In: Buckley, P. J. and Michie, J. (eds): Firms, Organizations and Contracts. New York: Oxford University Press.

    • Search Google Scholar
    • Export Citation
  • Johnson, M. A. and Pasour, E. C. (1981): An Opportunity Cost View of Fixed Assets Theory and the Overproduction Trap. American Journal of Agricultural Economics, 63(1): 17.

    • Search Google Scholar
    • Export Citation
  • Kornai, J. (1995): Hyways and Byways: Studies on Reform and Post-Socialist Transition. Cambridge: MIT Press.

  • Kotter, J. (1999): Cultures and Coalitions. In: Gibson, R. (ed.): Rethinking the Future. London: Nicholas Brealey Publishing.

  • Kröger, F., Träm, M. and Vandenbosch, M. (1999): Wachsen wie die Sieger — Erfolgsstrategien europäischer Spitzenunternehmen. Wiesbaden: Gabler.

    • Search Google Scholar
    • Export Citation
  • Luthans, F., Stajkovic, A. D. and Ibrayeva, E. (2000): Environmental and Psychological Challenges Facing Entrepreneurial Development in Transitional Economies. Journal of World Business, 35(1): 95110.

    • Search Google Scholar
    • Export Citation
  • Mathijs, E. and Swinnen, J. F. M. (1998): The Economics of Agricultural Decollectivization in East Central Europe and the Former Soviet Union. Economic Development and Cultural Change, 47(1): 126.

    • Search Google Scholar
    • Export Citation
  • Mathijs, E. (2000): Perspectives on Restructuring during Transition. Paper at the KATO Symposium, Berlin, 2–4 November.

  • Menard, C. (1997): Internal Characteristics of Formal Organizations. In: Menard, C. (ed.): Transaction Cost Economics — Recent Developments. Cheltenham: Edward Elgar Publishing.

    • Search Google Scholar
    • Export Citation
  • Miles, M. B. and Huberman, A. M. (1994): Qualitative Data Analysis: An Expanded Source Book. London, New Delhi: Thousand Oaks.

  • MzCR (Ministry of Agriculture, Czech Republic; 1999): Zprava o stavu zemedelstvi CRza rok 1998 — Zelena zprava [Green Report on the Status of Agriculture in the Czech Republic in 1998]. Prague.

  • North, D. C. (1998): Economic Performance Through Time. In: Eicher, K. and Staatz, J. M. (eds): International Agricultural Development. 3rd ed., Baltimore: John Hopkins University Press, 7889.

    • Search Google Scholar
    • Export Citation
  • North, D. C. (2000): Institutions, Organizations and Market. Paper downloadable from: http://econwpa.wustl.edu:8089/eps/eh/papers/9612/9612005.html.

  • OECD (1999): Agricultural Policies in Emerging and Transition Countries 1999. Paris.

  • Prendergast, C. (1999): The Provision of Incentives in Firms. Journal of Economic Literature, 37: 763.

  • Raiser, M. (1999): Trust in Transition. Working Paper No. 39, European Bank for Reconstruction and Development, London.

  • Rabinowicz, E. and Swinnen, J. F. M. (1997): Political Economy of Privatization and Decollectivization of Central and East European Agriculture: Definitions, issues and methodology. In: Swinnen, J. F. M. (ed.): Political Economy of Agrarian Reform in Central and Eastern Europe. Aldershot: Ashgate Publishing.

    • Search Google Scholar
    • Export Citation
  • Ratinger, T. and Rabinowicz, E. (1997): Changes in Farming Structures in the Czech Republic as a Result of Land Reform and Privatization. In: Swinnen, J. F. M., Buckwell, A. and Mathijs, E. (eds): Agricultural Privatisation, Land Reform, and Farm Restructuring in Central and Eastern Europe. Aldershot: Ashgate Publishing.

    • Search Google Scholar
    • Export Citation
  • Roumasset, J. (1995). The Nature of the Agricultural Firm. Journal of Economic Behavior & Organization, 26: 161177.

  • Roumasset, J. and Uy, M. (1987): Agency Costs and the Agricultural Firm. Land Economics, 63(3): 290302.

  • Schaub, H. (1997): Sunk Costs, Rationalität und ökonomische Theorie. Stuttgart: Schäffer-Poeschel.

  • Schmitt, G. (1993): Why Collectivization of Agriculture in Socialist Countries has Failed: a Transaction Cost Approach. In: Csáki, Cs. and Kislev, Y. (eds): Agricultural Co-operatives in Transition. Boulder: Westview Press.

    • Search Google Scholar
    • Export Citation
  • Schmitt, G. (1997): Haushalts-und Betriebsgrößen in der Landwirtschaft: Zum Problem der optimalen Betriebsgröße und des optimalen Größenwachstums. Berichte über Landwirtschaft, 71: 377398.

    • Search Google Scholar
    • Export Citation
  • Sedik, D. J., Trueblood, M. A. and Arnade, C. (2000): Agricultural Enterprise Restructuring in Russia 1991–1995: A Technical Efficiency Analysis. In: Wehrheim, P., Serova, E. V., Frohberg, K. and Braun, J. v. (eds): Russia’s Agro-food Sector: Towards Truly Functioning Markets. Dordrecht: Kluwer Academic Publishers.

    • Search Google Scholar
    • Export Citation
  • Simon, H. (1978): Rationality as Process and as Product of Thought. American Economic Review, 68: 116.

  • Spulber, D. F. (1994): Economic Analysis and Management Strategy: A Survey Continued. Journal of Economics & Management Strategy, 3(2): 355406.

    • Search Google Scholar
    • Export Citation
  • Strauss, A. and Corbin, J. (1990): Grounded Theory: Grundlagen qualitativer Sozialforschung. Weinheim: Psychologie Verlags Union.

  • Stryjan, Y. (1998): Between Membership and Ownership: Collective Farms and Owners’ Co-operatives in Czech Agriculture. Journal of Enterprise and Participation, 1(2): 123142.

    • Search Google Scholar
    • Export Citation
  • Swinnen, J. F. M. (1997). The Choice of Privatization and Decollectivization Policies in Central and Eastern European Agriculture: Observations and Political Economy Hypotheses. In: Swinnen, J. F. M. (ed.): Political Economy of Agrarian Reform in Central and Eastern Europe. Adlershot: Ashgate Publishing.

    • Search Google Scholar
    • Export Citation
  • Swaan, W. (1994): Knowledge, Transaction Costs and the Problems of Transformation. Eastern European Economics, 3858.

  • Tillack, P. and Schulze, E. (2000): Institutional Issues at the Farm-Level. In: Wehrheim, P., Serova, E. V., Frohberg, K. and Braun, J. v. (eds): Russia’s Agro-Food Sector: Towards Truly Functioning Markets. Kluwer Academic Publisher, 447470.

    • Search Google Scholar
    • Export Citation
  • Warren, B. (1994): On Becoming a Leader. Wilmington: MA: C&C Associates.

  • Williamson, O. E. (1985): The Economic Institutions of Capitalism. New York: Free Press.

  • Williamson, O. E. (1996): The Mechanisms of Governance. New York: Oxford University Press.

  • Williamson, O. E. (1998): Transaction Cost Economics: How it Works, Where it is Headed. De Economist, 146: 2358.

  • Williamson, O. E. (2000): The New Institutional Economics: Taking Stock, Looking Ahead. Journal of Economic Literature, 38: 595613.

  • Wolz, A., Blass, G., Namerova, I. and Buchta, S. (1998): Agricultural Transformation in Slovakia: The Change of Institutions and Organisations. Saarbrücken: Verlag für Entwicklungspolitik.

    • Search Google Scholar
    • Export Citation