The Value of Relationships : Evidence from a Supply Shock to Kenyan Flower Exports

@inproceedings{Macchiavello2010TheVO,
  title={The Value of Relationships : Evidence from a Supply Shock to Kenyan Flower Exports},
  author={Rocco Macchiavello and Ameet Morjaria},
  year={2010}
}
  • Rocco Macchiavello, Ameet Morjaria
  • Published 2010
When contracts are incomplete …rms facilitate trade by developing relationships in which future rents deter short-term opportunism. We study how future rents assure contractual performance in the Kenya ‡ower export sector. Based on revealed preferences we compute a lower bound to the value of these rents for the exporters: the value of a relationship must be greater or equal than the revenues foregone by not selling on the spot-market at higher prices. Controlling for buyer and seller …xed e… CONTINUE READING