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Coordination of the California Winegrape Supply Chain*

Published online by Cambridge University Press:  15 May 2014

Jason R.V. Franken
Jason R.V. Franken*
Affiliation:
School of Agriculture, Western Illinois University, 313 Knoblauch Hall, 1 University Circle, Macomb, IL 61455; e-mail: [email protected].
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Abstract

This study investigates factors influencing coordination of the California grape and wine supply chain. Results corroborate prior findings that quality considerations and needs to protect investments in specialized or durable assets significantly increase usage of more formal coordination mechanisms, such as formal contracts and vertical integration or ownership. Consistent with findings for other industries, such investments are associated with greater contract complexity and inclusion of enforcement provisions, while trade partners' prior experience working together decreases contract complexity. Furthermore, our results suggest that quality considerations extend to greater use of formal contracts further downstream. (JEL Classifications: L1, L2, Q13)

Keywords

contractsgrapesvertical coordinationwine
Type
Articles
Information
Journal of Wine Economics , Volume 9 , Issue 2 , August 2014 , pp. 183 - 201
Copyright
Copyright © American Association of Wine Economists 2014 

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Footnotes

*

The paper benefited from helpful conversations with and suggestions from attendees of the 2012 Annual Meeting of the American Association of Wine Economists in Princeton, New Jersey. I also thank an anonymous referee for constructive comments.

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