Abstract
This paper discusses long-term contracts as a particular organizational form situated somewhere between full vertical integration and short-term, market-based trading in the natural gas industry. We focus on the determinants of the duration of contracts under changing technical, economic, and institutional conditions. Using 311 long-term contracts we find that duration decreases as international market structures grow more competitive, and that contracts linked to an asset-specific investment extend, on average, three years longer.
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von Hirschhausen, C., Neumann, A. Long-Term Contracts and Asset Specificity Revisited: An Empirical Analysis of Producer–Importer Relations in the Natural Gas Industry. Rev Ind Organ 32, 131–143 (2008). https://doi.org/10.1007/s11151-008-9165-0
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DOI: https://doi.org/10.1007/s11151-008-9165-0