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A value chain and cluster perspective on competitiveness of European fresh vegetable production – Case studies from Germany, Italy, and Spain

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  • Bettina Riedel

    ()
    (Humboldt Universität zu Berlin)

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    Abstract

    In the present study we combine cluster theory with a value chain approach, with the aim of discovering elements of the European fresh vegetable business that could enable local producers to gain competitive advantages in a global market. European producers of fresh vegetables are under pressure to improve their performance and increase their competitiveness. Competitive advantage can be gained through innovation and by using unique resources stemming from cooperation between producers and complementary actors in local clusters. However, locally clustered producers do not sell to open markets but need access to value chains governed by lead firms, the large European retail chains, which set the rules and conditions of participation. The study presents first results from a multiple case-study analysis involving three different European regions in Germany, Italy and Spain specialized in fresh vegetable production. In-depth interviews with practitioners allowed us to confirm some main trends in business organization in the European fresh vegetable industry, but also to point out some interesting peculiarities of this industry. Local fresh vegetable producers become competitive due to their integration both in local production and wider marketing networks, where unique knowledge is created and interchanged by personal relationships. Further concentration on the local level is claimed to countervail power imbalances that usually favor buyers. The need for leading supermarket chains to build up direct relationships with key suppliers disturbs the functioning of existing relationship patterns in the local cluster. Creation of exclusive relationships with retail chains is pursued by entrepreneurs of innovative producing farms who treat their special knowledge and capacities as competitive advantages in the sharp competition in world markets and do not share it with other cluster actors.

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    File URL: http://ageconsearch.umn.edu/bitstream/54094/2/DEIAgraWorkingPaperSeries_2009-001_Riedel20091014.pdf
    File Function: WP version, October 2009
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    Bibliographic Info

    Paper provided by Alma Mater Studiorum University of Bologna, Department of Agricultural Economics and Engineering in its series DEIAgra Working Papers with number 9001.

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    Length: 23 pages
    Date of creation: Oct 2009
    Date of revision: Oct 2009
    Publication status: Published in Agecon Search
    Handle: RePEc:bag:deiawp:9001

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    Keywords: Fresh vegetables; value chains; clusters; competitiveness;

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    References

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    1. Maskell, Peter & Malmberg, Anders, 1999. "Localised Learning and Industrial Competitiveness," Cambridge Journal of Economics, Oxford University Press, vol. 23(2), pages 167-85, March.
    2. John Humphrey & Hubert Schmitz, 2008. "Inter-firm relationships in global value chains: trends in chain governance and their policy implications," International Journal of Technological Learning, Innovation and Development, Inderscience Enterprises Ltd, vol. 1(3), pages 258-282.
    3. Carlo Pietrobelli & Federica Saliola, 2008. "Power relationships along the value chain: multinational firms, global buyers and performance of local suppliers," Cambridge Journal of Economics, Oxford University Press, vol. 32(6), pages 947-962, November.
    4. Timothy Sturgeon & Johannes Van Biesebroeck & Gary Gereffi, 2008. "Value chains, networks and clusters: reframing the global automotive industry," Journal of Economic Geography, Oxford University Press, vol. 8(3), pages 297-321, May.
    5. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-40, June.
    6. Schmitz, Hubert, 1999. "Collective Efficiency and Increasing Returns," Cambridge Journal of Economics, Oxford University Press, vol. 23(4), pages 465-83, July.
    7. John Humphrey & Hubert Schmitz, 2002. "How does insertion in global value chains affect upgrading in industrial clusters?," Regional Studies, Taylor & Francis Journals, vol. 36(9), pages 1017-1027.
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