Private Ordering and the Structure of Fruit Markets in the Mekong Delta
| Autor: | Tu Anh Vu Thanh, Brian J.M. Quinn |
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| Rok vydání: | 2008 |
| Předmět: | |
| Zdroj: | SSRN Electronic Journal. |
| ISSN: | 1556-5068 |
| DOI: | 10.2139/ssrn.1117783 |
| Popis: | This paper investigates the economic relationships between farmers and middlemen in Vietnam's Mekong Delta. Using survey data from a sample of fruit farmers and middlemen we find that participants in the farm-gate market for pomelos carry out relatively complex transactions by granting buyers credit with little explicit reliance on formal legal structures. Contrary to expectations, we also find that farmers do not rely to a large degree on extensive relationships or other private ordering mechanisms. Rather, farmers attempt to minimize risk associated with contract default by diversifying sales among strangers and repeat buyers. The survey is a snapshot of an evolving market. There is evidence that market participants use the structure of markets to identify reliable business partners and then reward them with future business. This suggests that the structure of this market over time will migrate towards more relational contracting. The spontaneous structuring of this market and the adaptations made by participants provide lessons about how in the absence of strong formal legal rights parties can generate and sustain cooperation. |
| Databáze: | OpenAIRE |
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