IJBI

Abstract
Unprecedented development in the theory of economic organizations in past decades has brought about to significant evolution in understanding of the essence and efficiency of agribusiness organizations. Nevertheless, the traditional approach for assessing efficiency of economic organization is (through “technical or financial efficiency” of production factors, “productivity of employed resources”) is widely used. Consequently, it cannot be explained: why there are so many organizations performing with great variation in efficiency for a long period of time. This paper incorporates achievements of interdisciplinary New Institutional Economics and suggests a framework for assessing the efficiency of organizations for agribusiness and innovation. According to this new approach we have to study firm and farm as a governing rather than as production structure; assess comparative efficiency of alternative market, contract, internal, and hybrid modes of governance; take into account transaction costs and institutional, behavioral, dimensional, technological and natural factors; enrich (reformulate) criteria of economic efficiency of business organization; and better determine effective horizontal and vertical boundaries of business organizations. Specificity in the area of agri-business research and innovations is also clarified. Effective boundaries of different governing modes are assessed, and needs and forms for public intervention in agrarian research and innovation are clarified.