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Vertical Coordination | Send-To | Print | More
Category: Business & Economy | 1170 views
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© Economic Research Service
Vertical coordination: A general term that refers to the methods by which goods and services may be exchanged between different stages of production, as among farmers, agricultural wholesalers, processors, and retailers. Broadly, exchange may be coordinated through spot markets, where many buyers and sellers interact on a frequent basis and establish daily cash prices that direct products among different buyers; contracts, in which specific buyers and sellers reach more formal and longer term agreements that specify product characteristics, terms and duration of exchange, and product volumes; or vertical integration, in which units at different stages of production are owned by the same firm and product flows are coordinated through administrative means.
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