THE HOLD-UP PROBLEM IN AGRICULTURAL CONTRACTS. A STUDY OF CONTRACTUAL CORRELATIONS BETWEEN POLISH GROUPS OF AGRICULTURAL PRODUCERS AND FIRST RECIPIENTS
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The pre- and post-hold-up problem occurs when partners behave in opportunistic way, contracts are incomplete and there are requirements to invest in assets (both specific and general ones). The most exposed to this issue are farmers having weaker market position than their partners or when there is a significantly lower level of horizontal integration among them. The primary purpose of the paper is twofold. The first goal is to identify farming contracts related to investments in assets (the post-contractual hold-up problem), while the second one is to recognise these agricultural producers’ groups in Poland, which were exposed to the pre-contractual hold-up problem. To complete these research goals the case study method, based on empirical data, was applied. The analysis of data was carried out through descriptive statistics and the chi-square test. One can claim that the post-contractual hold-up problem may have occurred in ca. 42% of total contracts. The research proves also that approximately 31% of agricultural producer’ groups have never been exposed to the pre-contractual hold-up problem.
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