Institutional mismatch in a transition economy. The collapse of Swedmilk Macedonia

Abstract

Purpose -The purpose of this paper is to present theoretical explanations for the failure of the largest dairy processing firm in Former Yugoslav Republic of Macedonia (FYROM) after only about one year of operation. Design/methodology/approach -The paper contains a case study on the establishment and failure of a new firm is presented. Data were collected through mass media reports and interviews with knowledgeable individuals in the dairy industry. The data were analyzed using neo-institutional theories, primarily agency theory. Findings -The core of the explanation is that the various categories of institutions were not aligned. For example, poor contract enforcement created insurmountable agency costs for all parties involved. Research limitations/implications -As this paper is based on a case study it is uncertain to which extent the finding can be generalized. Originality/value -Most case studies describe successes. This paper presents a case where the odds for success were poor, but the project was still initiated.

Natural rubber institutional arrangement in efforts to accelerate rural economic development in the province of Riau

“…The research has the objectives to determine Rapid Rural Appraisal (RRA) and economic development. Several studies on development of RRA by Akan (2011), Badu et al (2013); Bateman (1998), Chigara (2011); Kovič (2010); Kshetri (2011), Kyei and Chan (2017); Lixin (2009), McGill (1995); McGill (1997), Mihret et al (2012); Noordin et al (2017); Silva et al (2015); Williams and Horodnic (2016); Yoon and Hyun (2010); and economic development by Abdullah and Ismail (2014), Adanu (2017); Alao and Raimi (2011), Chatterjee (1996); Clarke (1999), Giffin (1994); Grossekettler (1994), Herath (2005); Huang et al (2017), Intriligator (1996); Marsh (2015), Mohamed et al (2014); Prasad (2003), Thapisa (1999); Tuna and Nilsson (2013). …”

“…economic development by Abdullah and Ismail (2014), Adanu (2017); Alao and Raimi (2011), Chatterjee (1996); Clarke (1999), Giffin (1994); Grossekettler (1994), Herath (2005); Huang et al (2017), Intriligator (1996); Marsh (2015), Mohamed et al (2014); Prasad (2003), Thapisa (1999); Tuna and Nilsson (2013).…”

Effects of mergers on processed milk market in Kenya

“…On the other hand, other studies have questioned the performance of the dairy industry. For instance, Tuna and Nilsson (2013) studied the failure of the largest dairy processing firm (the Swedmilk dairy) in Former Yugoslav Republic of Macedonia after only about one year of operation where poor contract enforcement created insurmountable agency costs for all parties involved. Gupta and Roy (2012) provided an assessment of benefits to farmers from vertical coordination in milkfed dairy.…”