Implicit contracts as a method of vertical co-ordination in the New Zealand meat industry : a thesis submitted in partial fulfilment of the requirements for the degree of Master of Agricultual Economics
A framework is developed using Williamson's seminal discussion of contractual arrangements and governance choice. The New Zealand Meat industry is the subject of this study in that contractual arrangements exist along-side more conventional trading relationships. The main body of the paper is devoted to; the review of other empirical studies of vertical co-ordination and; the collection and primary analysis of data. Primary results show the form and extent of vertical co-ordination in a small non-random sample. While the neo-classical contract to supply stock is used, many producers and processors operate and co-ordinate with a relational, implicit contract in which the producer deals almost exclusively with one company and develops a long term and 'important relationship' with an agent. Several regressions on measures of co-ordination, included in the appendices, while far from robust, show interesting patterns related to the transaction cost hypothesis.