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Vertical integration as a factor of competitiveness of agriculture

Author

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  • L. Grega

    (Mendel University of Agriculture and Forestry Brno, Faculty of Business and Economics, Czech Republic)

Abstract

Vertical integration within agricultural and food sector is one of the decisive factors influencing market structure and competitiveness of agriculture. There are two groups of motives for vertical integration. Motive of efficiency is based on the effort to minimise production cost or transaction cost. Market power is not solely the result of horizontal expansion, but if variable inputs are considered, vertical integration may contribute to market power and so to growing share in consumer price. The article analyses and methodologically specifies these motives for vertical integration and determines possibilities of quantification of the effects of vertical integration.

Suggested Citation

  • L. Grega, 2003. "Vertical integration as a factor of competitiveness of agriculture," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 49(11), pages 520-525.
    • Handle: RePEc:caa:jnlage:v:49:y:2003:i:11:id:5441-agricecon
    DOI: 10.17221/5441-AGRICECON
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    References listed on IDEAS

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    1. John Haldi & David Whitcomb, 1967. "Economies of Scale in Industrial Plants," Journal of Political Economy, University of Chicago Press, vol. 75(4), pages 373-373.
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