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Causes of Investment on the Broiler's House of Farmers: Focusing on Hold-up Problem  

Lee, Myoung-Ki (Korea Rural Economic Institute)
Jeong, Min-Guk (Korea Rural Economic Institute)
Jeon, Sang-Gon (Dept. of Agricultural Econ., Gyeongsang National Univ. (Insti. of Agric. & Life Sci.))
Publication Information
Journal of agriculture & life science / v.46, no.3, 2012 , pp. 143-151 More about this Journal
Abstract
This paper analyzes whether under-investment due to hold-up exists in broiler industry or not by using survey data on broiler growers. When a grower who has facilities to be required for contract is aware of the possibility of being held-up by an integrator, he/she may invest in relation-specific asset less than is optimal. The result shows that when a grower thinks that finding a new integrator in the region is difficult after the current contract being terminated, under-investment exists. When a grower has the experience that a current integrator required her/him to do something not written on the contract, she/he may have invested less. However it is not statistically significant.
Keywords
Broiler; Hold-up; Under-investment; Multiple linear regression model;
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