Transaction cost theory holds that firms
economize on transaction costs by designing contractual arrangements to match the attributes of
production activities and firm characteristics. A
simple econometric model is used to test empirically the hypothesis that forest companies’ characteristics influence the choice of specific payment methods. The focus is on firm characteristics due to the lack of available information on
the attributes of activities, which are expected to
be quite standard across firms and throughout BC
(mainly because of government environmental
.
regulations) .