Title: Transaction Costs, Agricultural Production Specialisation and Farm Structure in Central and Eastern Europe
Citation: POST-COMMUNIST ECONOMIES vol. 21 no. 2 p. 191-201
Publication Year: 2009
JRC N°: JRC48616
ISSN: 1463-1377
URI: http://publications.jrc.ec.europa.eu/repository/handle/JRC48616
DOI: 10.1080/14631370902778526
Type: Articles in periodicals and books
Abstract: In Western Europe, the USA and other developed countries agriculture is dominated by small family farms. In Central and Eastern European countries (CEECs) a dual structure of farms exists. There are large corporate farms (CF) and small family farms (FF) in CEECs. This article shows that both CF and FF specialise in commodities in which they have a comparative advantage. CF specialise in capital-intensive products and in products with low labour monitoring requirements. FF specialise in products with higher labour monitoring requirements. The implication of this study is that farm structure indirectly determines in which products a country will be competitive on international markets. This is especially important for transition countries where high transaction costs hinder changes of farm organisation. Because of high transaction costs, farms are more flexible in adjusting production structure than adjusting farm organisation in transition countries.
JRC Directorate:Growth and Innovation

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