Vertical organization of agribusinesses in transition economies: Hungarian production systems or agricultural franchising?

Abstract

This article develops a modified version of franchising which may serve as an alternative form of vertically organizing agricultural production and service firms in transition economies. The concept of agricultural franchising as presented here can be seen as a proposal for restructuring the vertical organization of the agricultural sector in transition economies. Since agricultural franchising would be a contract innovation if adopted, that concept will be compared with Hungarian production systems, which are closest in design to agricultural franchising. Based on this comparison some tentative conclusions about the potential feasibility of agricultural franchising for transition economies will be drawn. © 1999 John Wiley & Sons, Inc.