The transaction costs classification in the rural economy sector

Размещено на http://allbest.ru

¹National University of “Kyiv-Mohyla Academy”

²Kyiv National University of Technologies and Design

The transaction costs classification in the rural economy sector

¹Kurylo Liudmyla, Doctor of Economic Sciences, Professor

²Slyozko Tetyana, Doctor of Philosophy in Economics, Associate Professor

Summary

Key words: classification, transaction costs, institutes, institutions, playing field, institutional environment, economy, market, society, state.

Statement of the problem

The transaction costs and their classification are one of the insufficiently studied objects in the economic science, in particular in its rural sector. The unresolved issues include the following ones: what the transaction costs are; why they are associated with institutes, institutions and institutional environment; what the classification of transaction costs according to the institutional approach should look like. It was the search for answers to these issues that led to this study, the results of which are summarized in this article.

Analysis of research papers on this subject shows that the transaction costs are first mentioned in the context of the institutionalism concept introduced into the scientific discourse by W. Hamilton, who defined it as a common way of thinking or action, reflected in the habits of groups or the whole nation [1, p. 31]. The institutional theory in the economic science was creatively developed by R. Coase [2], D. North [3], J. Hodgson [4]. Undoubtedly, this approach was also developed regarding the economic science on the whole and the rural sector in particular. This is evidenced by the studies of such authors as O. Shpykuliak and L. Kurylo [5], V. Zinovchuk [6], O. Vlasenko [7], L. De- mydenko[8], S. Tymofiiv [9], as well as the studies of M. Dubinin [10], V. Zhuk [11], P. Haidutskyi[12], O. Borovych [14], A. Hrechko[15], O. Palchuk [16], V. Yatsyna [17], R. Tiekmienzhy, O. Sokil [18] etc. concerning the transaction costs classification.

The aim of the article is to investigate the essence of the transaction costs and their association with the institutes and institutions united in the so-called institutional environment; to offer a classification of the transaction costs using an institutional approach, having concurrently determined the correlation between the transaction costs composition and structure and the size of the agricultural enterprise.

Narration of the main material

The link between the transaction costs and the institutionalism categories is explained by the fact that it is in this theory that they are first mentioned as the result of the interaction between the market agents aimed at implementing the agreements and accompanied by mutual arrangements and organizational costs. These are the costs associated with the evaluation of goods and services and the terms of exchange, the contracts and agreements efficiency, the participants' ideological beliefs about the environment and the compliance with the playing field. After all, the latter is an important part of the institutional theory, and according to D. North, it is "... the created by people restrictions that direct human interaction in a certain way ...” and contribute to a certain relationship between individuals [3]. transaction institutionalism economy agricultural

The total of the institutes and institutions form an institutional environment, the development level of which largely affects the economy efficiency, since the favorable or unfavorable conditions for economic activity are created within this environment. The favorable conditions will appear if the institutions accept the transparent and accountable playing field. The unfavorable conditions are created when there is no transparency, which hinders the economy development through various tools: bureaucracy, inadequate property rights protection, monopolization of the economy, oligarchy and corruption. In both cases, the playing field is enforced through the institutional environment subjects, in particular lawyers and bankers, accountants and consultants, political figures and analysts etc. Their actions are aimed at regulating the institutional environment objects, one of which is the transaction costs.

They are defined as the process of ownership or powers' part transfer from one subject to another, which is accompanied by certain costs incurred by the subjects of property rights [16] and is associated with the search for consumers, suppliers, new business partners, as well as with the subsequent contractual activity between the market participants, the protection of property rights, the control over the compliance with the contracts and the coercion to their undertaking [18]. Some authors resort to attempts of generalizing these costs in certain forms [19], others consider these forms to be the classes and types [13]. For the most part, they are classified according to different features, thus deepening the essence of the object. Having examined certain classifications, we will determine their main directions and characteristics, which are reflected in Table 1.

The table 1 shows that the scientific literature defines the purposes of managing the transaction costs as their main classification criterion. The authors elaborate these purposes in different aspects: providing the necessary information for users, accounting, according to the place where the costs incur as well as to the scope of activities, including the agricultural industry.

The second aspect in the classification of the transaction costs is based directly on the institutional approach, according to which these costs are divided into the transformation and transaction ones [3; 11; 12]. The former are the usual costs for processing the raw material into the released product, associated with the physical impact on the object, that is, the costs associated with the transformational function. The latter are, basically, the costs for business support that heavily depend on the institutional environment. The authors of this classification consider the transaction costs to be an object of the institutional environment, which includes the costs for the following purposes: organizational and legal business support; gathering of the vital for business information; agreement conclusion and control over their implementation; lobbying one's own interests through professional associations and organizations; establishing and maintaining contact with the influential figures; costs complying with the public trust institutions, as well as with the social and environmental demands [11; 12].

However, according to the data given in the table 1, it is the transaction costs management purposes classification rather than the institutional one that prevails in the scientific researches. That being said, the institutional approach to the transaction costs classification is not taken into account altogether. This applies to the classification of R. Tiekmienzhy and O. Sokil, who qualify all the costs of the enterprise, including the administrative and direct ones, as the transaction costs and divide them into the following categories: 1) administrative costs, including the total cost of the enterprise general management; 2) according to the connection with the released product: 2a) costs related to the released product (Product Costs) and 2b) expenses related to the time period (Period Costs); 3) according to the behavior pattern, using the sold output volume as the baseline: 3a) fixed (permanent) and 3b) variable [15]. Undoubtedly, such classification cannot be used in the transaction costs study, since it applies to all the costs of the enterprise.

An important feature of this classification is the cost attribute for the accounting purposes offered by A Hrechko, who divides the costs into the influenceable and non-influenceable (non-official and illegal payments (non-influenceable), since only those transaction costs that are confirmed by the relevant documents, that is the influenceable ones [15], are to be reflected in the accounting. These are the transaction costs indeed, although the abovementioned author considers them in the costs classification for the management purposes.

As shown in table 1, there are different classifications of the transaction costs for the rural sector, in particular for the purpose of the information detal- ization for the users. This classification is offered by M. Dubinina and A. Skorozinska [13], O. Borovych [14]. These authors divide the costs according to the contract type, the composition and the organizational form, the economic substance, the connection with the market mechanisms and the subjects. This classification is important because of the feature highlighted in the source [10], that is a quantitative evaluation of their size, which distinguishes the following characteristics: a) internal production costs, which are directly related to the goods promotion in the market by one's own units of the economic agent; b) external costs, which include the costs for the third-party organizations classification will have a totally different content (Table 3).

Table 1

A brief overview of the transaction costs classification's existing directions and criteria

Table 2

The transaction costs incurrence according to the composition and the structure and depending on the size of the agricultural enterprise

* While defining the composition and the structure of the transaction costs we used the research sources data, in particular the work by O. Vlasenko [7]

Table 3

The costs classification according to the institutional approach

* The transaction costs classification according to the institutional approach was created taking into consideration the classifications of the other authors [3; 11; 12].

In the beforementioned classification these costs become an integral part of all the enterprise costs, united by one purpose -- the management demands.

This occurs due to the fact that all the costs comply with the sole purpose of managing them, which is the costs optimization (both the transformation and the transaction ones).

Within the limits of this classification feature, the costs detalization according to the institutional approach is carried out according to the sources [3; 11; 12] in two groups: 1.1 transformation, 1.2 transaction.

Each group distinguishes the costs according to the designated features. For example, the administrative costs (1.1.1) are costs associated with the enterprise management and its costs, they cannot be part of the transaction costs, and therefore they are attributed to the transformation costs.

The same applies to the other costs: the costs according to the behavior pattern, the organizational form, the internal production -- all of them are the enterprise costs, which are directly related to the production output.

On the other hand, the influenceable or the non-in- fluenceable costs are the transaction costs, since not all the costs associated with, for example, the information search, the costs for negotiating and counteracting the opportunistic behavior, the specification and the property rights protection costs etc. can always be controlled, although they are mandatory for the enterprise to occupy a certain place in the market. It should be noted that we added a certain position 1.2.9. -- the costs according to the enterprise size- to the classification. The fact that such costs division and their introduction into the classification is appropriate is proved above.

Conclusion

Researching the concept of the transaction costs and their classifications made it possible to determine the transaction costs composition and structure dependence on the agricultural enterprise size and to create the transaction costs classification according to the institutional approach, in which the sole purpose of providing the management demands is the common feature of all the costs, and the transaction and the transformation costs are a structural part of this feature.

The problem of the transaction costs classification in their association with the institutes and the institutions in the institutional environment of the economy rural sector is quite complicated, since it contains many argumentative issues that require further indepth research.

References

1. Oleynik A. (2007) Institutsionalnaya ekonomika [Institutional economy]. Moscow: ИНФРА. (in Russian).

2. Coase R. H. The Problem of Social Cost, Journal of Law and Economics, -- 1960. -- Р. 1-44.

3. North D. C. Institutions and Economic Growth: An Historical Introduction. THESSIS, vol. 2, 286 p.

4. Hodgson G. (2003) Economics and Institutions: A Manifesto for a Modern Institutional Economics.

5. Shpykuliak O. H., Kurylo L. I. (2010) Instytutsionalizatsiia innovatsiinoi diialnosti v ahrarnii sferi ekonomiky [Institutionalization of the innovation activity in the rural economy sector]. Oblik i finansy APK [Accounting and finance] (Electronic journal), vol. 3. Available at: http://magazine.faaf.org.ua/institucionalizaciya-innovaciynoi-diyal- nosti-v-agrarniy-sferi-ekonomiki.html

6. Zinovchuk V., Vlasenko O. (2009) Upravlinnia transaktsiinymy vytratamy v ahrobiznesi [The transaction costs management in the rural business]. Management theory and studies for rural business and infrastructure development, (electronic journal), vol.17. Available at: http://ir.znau.edu.ua/bitstream/123456789/2479/3/Mtsrbid_2009_17_157-169.pdf

7. Vlasenko O. P. (2014) Kooperatyvni zasady upravlinnia transaktsiinymy vytratamy v ahrobiznesi [The transaction costs management cooperative basis in the rural business]. Available at: http://ir.znau.edu.ua/bit- stream/123456789/1000/1/Cooperative_2014_233-238.pdf

8. Demydenko L. M. (2011) Klasyfikatsiia transaktsiinykh vytrat i yikh vzaiemozv'iazok iz lohistychnymy vytratamy u kormovyrobnytstvi [The transaction costs classification and their connection with the feed production logistical costs]. Available at: http://www.pdaa.edu.ua/sites/default/files/nppdaa/2011/01/092.pdf

9. Tymofiiv S. V. (2014) Do problemy upravlinnia transaktsiinymy vytratamy v ahrarnykh pidpryiemstvakh [The transaction costs management in the agricultural enterprises]. Ekonomika ahrarnoho sektora ta upravlinnia natsional- nym hospodarstvom [The rural sector economy and the national agriculture management] (Electronic journal), vol. 53. Available at: http://chtei-knteu.cv.ua/herald/content/download/archive/2014/v1/NV-2014 V1_16.pdf

10. Dubinina M. V. (2014) Znachennia transaktsiinykh vytrat u formuvanni ekonomichnoho potentsialu silskohos- podarskoho pidpryiemstva [The transaction costs significance in the agricultural enterprise economic potential forming]. Visnyk ahrarnoi nauky Prychornomor'ia [The Black Sea region agricultural science reporter] (electronic journal), vol. 4. Available at: http://base.dnsgb.com.ua/files/journal/Visnyk-agrarnoi-nauky-Prychornomorja/VANP2014/ VANP-2014-4(81)/VANP-2014-4(81)_3-11.pdf

11. Zhuk V. M. (2013) Vporiadkuvannia transaktsiinykh vytrat -- stratehichnyi faktor posylennia konkurentospro- mozhnosti [The transaction costs regulation as a a strategic factor in the competitiveness reinforcement]. Proceedings of the Vseukrainskyi konhres vchenykh ekonomistiv-ahrarnykiv (Ukraine, Kyiv, October 16-17, 2013) (eds. Lupenko Yu.O., Sabluk P. T.), pp. 88-95.

12. Haidutskyi P. I., V. M. Zhuk (2012) Oblik transaktsiinykh vytrat -- vahomyi faktor konkurentospromozhnosti v suchasnii ekonomitsi [The transaction costs accounting as a significant competitiveness factor in the modern economy]. Oblik i finansy APK [Accounting and finance] (electronic journal), vol. 3., pp. 9-19.

13. Dubinina M. V. Oblik transaktsiinykh vytrat [The transaction costs accounting]. Available at: dspace.mnau.edu. ua:8080/jspui/

14. Borovych O. V. (2009) Transaktsiini vytraty silskohospodarskykh pidpryiemstv: sklad i klasyfikatsiia [The agricultural enterprises transaction costs composition and classification]. Naukovyi visnyk Akademii munitsypalnoho upra- vlinnia, vol.7, pp. 50-58.

15. Hrechko A. V. (2011) Teoretychni aspekty vyznachennia transaktsiinykh vytrat z pozytsii yikh vplyvu na mikroe- konomichne seredovyshche [The transaction costs theoretical aspects according to their impact on the microeconomic environment]. Available at: http://www.nbuv.gov.ua/portal/soc_gum/evkpi/2011/5EP/35.pdf

16. Palchuk O. V., Ocheretiana O. O. (2012) Problemy formuvannia informatsiinoho zabezpechennia upravlinnia tran- saktsiinymy vytratamy v systemi bukhhalterskoho obliku [The informational transaction costs management formation issues in the accounting sphere]. Ekonomichni nauky [Economic science] (electronic journal), vol.22, pp.428-433. Available at: http://nbuv.gov.ua/UJRN/Npkntu e_2012_22(2)73

17. Yatsyna V. V. (2011) Osoblyvosti vyznachennia transaktsiinykh vytrat na pidpryiemstvi [The transaction costs definition peculiarities at the enterprise]. Available at: https://www.kpi.kharkov.ua/archive /2011/26/Yatsina.pdf

18. Tiekmienzhy R. O., Sokil O. H. (2013) Oblik i analiz transaktsiinykh vytrat v upravlinni pidpryiemstva [The trans

action costs accounting and analysis in the enterprise management]. Oblik i finansy APK [Accounting and finance] (electronic journal), vol.10, pp. 273-278. Available at: http://nbuv.gov.ua/UJRN/ecnof_2013_10(4) 44

19. Danko M. T. (2007) Teoretyko-metodolohichnyi aspekt vyznachennia transaktsiinykh vytrat [The theoretical and metpodological aspect of the transaction costs definition]. Ekonomichna teoriia, vol.1, pp. 36-46.

Размещено на Allbest.ru