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Long-Term Contracts and Asset Specificity Revisited: An Empirical Analysis of Producer-Importer Relations in the Natural Gas Industry

Referierte Aufsätze Web of Science

Christian von Hirschhausen, Anne Neumann

In: Review of Industrial Organization 32 (2008), 2, S. 131-143


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.