Reducing Hold-up Risks in Ethanol Supply Chains: A Transaction Cost Perspective

Ethanol plants sit at the intersection of three main supply chains, involving the procurement of feedstocks and the marketing of ethanol and distillers grains. A transaction cost framework assesses the extent to which uncertainty, asset specificity, and transaction frequency create incentives for opportunistic behavior by exchange partners leading to problems of hold-up. Using case study evidence from the western Canadian ethanol sector, solutions to the hold-up risks facing ethanol plants are explored. Contracting and integration feature strongly in downstream output markets. The positioning of the ethanol enterprise within a firm’s overall business model, whether as a stand-alone investment or as a forward or backward integration strategy, is an important consideration for future supply chain research in this sector.


Editor(s):
IFAMR, IFAMA
Issue Date:
May 01 2014
Publication Type:
Journal Article
DOI and Other Identifiers:
(ISSN#: 1559-2448) (Other)
PURL Identifier:
http://purl.umn.edu/167906
Published in:
International Food and Agribusiness Management Review, Volume 17, Issue 2
Page range:
83-106
Total Pages:
24
JEL Codes:
L14; L22; Q13
Note:
The IFAMR is published quarterly by the International Food and Agribusiness Management Association. www.ifama.org
Series Statement:
Volume 17
Issue 2




 Record created 2017-04-01, last modified 2017-05-27

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