Long-term Contracts and Asset Specificity Revisited
Auteur : Anne Neumann, Christian von Hirschhausen
Date de publication : 2006
Éditeur : Electricity Policy Research Group, Judge Institute of Management, University of Cambridge
Nombre de pages : 16
Résumé du livre
In this paper, we analyze structural changes in long-term contracts in the international trade of natural gas. Using a unique data set of 262 long-term contracts between natural gas producers and importers, we estimate the impact of different institutional, structural and technical variables on the duration of contracts. We find that contract duration decreases as the market structure of the industry develops to more competitive regimes. Our main finding is that contracts that are linked to an asset specific investment are on average four years longer than those who are not.