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Cuadernos de Administración

Print version ISSN 0120-3592

Abstract

GORBANEFF, Yuri  and  RESTREPO, Alicia. Determining factors for vertical integration in the Colombian fuel distribution chain. Cuad. Adm. [online]. 2007, vol.20, n.33, pp.125-146. ISSN 0120-3592.

This paper explains how forms of governance are selected for the Colombian fuel distribution chain and it formulates some proposals aimed at improving efficiency. The conceptual context is based on contract and transaction cost theory. The hypotheses made are demonstrated in two manners: empirically and using a formal model. The empirical work is based on the study of contracts signed between wholesalers and retailers, as well as on a survey given to wholesale company managers. The information obtained was processed using econometric models. The authors found that the more wholesalers design more complete contracts, the less they are interested in vertical integration. That strategy has limitations because more complete contracts increase tracking costs. Vertical integration once again becomes interesting when the wholesaler seeks to differentiate its products. The authors’ proposal is for retailers to encourage reliability strengthening measures and more complete contract designing, to limit such opportunism.

Keywords : Vertical integration; subcontracting; production chains.

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