Agric. Econ. - Czech, 2013, 59(11):537-541 | DOI: 10.17221/127/2012-AGRICECON

An organizational economics approach to the existence of sharecroppingShort Communication

Jiancai PI
Department of Economics, School of Business, Nanjing University, Nanjing City, Jiangsu Province, China

The paper provides a new explanation for the existence of sharecropping in agriculture from the perspective of organizational economics. Similar to a multinational enterprise's decision of whether to enter a joint venture or to choose a wholly owned subsidiary, we can see sharecropping as a joint venture and a fixed rent contract as a wholly owned subsidiary when we stand in the tenant's position. Our analysis shows that when the landlord has a strong enough comparative advantage in exerting one type of effort, he/she tends to choose the share contract.

Keywords: share contract, fixed rent contract, bargaining power

Published: November 30, 2013  Show citation

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Jiancai P. An organizational economics approach to the existence of sharecropping. Agric. Econ. - Czech. 2013;59(11):537-541. doi: 10.17221/127/2012-AGRICECON.
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