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Inter-firm Networks in the European Wine Industry

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  • Fabrizio Cafaggi
  • Paola Iamiceli
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    Abstract

    Following the current European policy framework, this research aims to study the role of inter-firm collaboration as a tool for enhancing competitiveness and innovation in the European market. In particular, it analyses the main models of inter-firm networks, both contractual and organisational, as emerging in the wine market in seven regions of five European countries: Loire (France), Trentino province (north-east Italy), Verona province (north-east Italy), Enna and Ragusa provinces (east Sicily, Italy), Douro and Porto regions (Portugal), Valencia (Spain), and selected regions of Hungary. The seven case studies are presented both individually and comparatively. The observation of concrete phenomena of inter-firm collaboration allows to compare more mature markets (like the French and the Italian ones) with markets that are undergoing a major restructuring process (like in Hungary): the former being characterised by higher propensity to inter-firm collaboration and higher degree of contractual and organisational innovation than the latter in terms of identification of effective tools of networks. The different mix between territory-driven production strategies and brand-driven production strategies also influences the type of networks and their role along the supply chain in each of the examined areas. Some common trends are considered: the higher propensity to form networks in the production phase than in distribution; the tendency to use linked bilateral contracts to coordinate the supply and distribution chain vertically, where power and value are asymmetrically distributed, while organisational networks are mostly used for horizontal cooperation among producers having similar market shares and producing complementary products or seeking for similar services supply. The increasing concentration of economic power among distributors is deeply influencing this picture, reinforcing hierarchy in vertical networks, especially in private label production, and stimulating some form of horizontal coordination as an attempt to counterbalance that concentration. Domestic and trans-national networks are compared and the impact of wine regulation is considered on their respective emergence. The role of European policies in promoting domestic and transnational networks is also examined. This shows the lack of coordination between rural and industrial policies, on the one side, and the definition of a menu of contractual and organisational models to be used to implement these policies, on the other side. The definition of a European legal framework on inter-firm networks could contribute to the fostering of innovation and competitiveness of European enterprises in the global market.

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    File URL: http://hdl.handle.net/1814/15654
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    Bibliographic Info

    Paper provided by European University Institute (EUI), Department of Law in its series EUI-LAW Working Papers with number 19.

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    Date of creation: 01 Dec 2010
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    Handle: RePEc:erp:euilaw:p0139

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    Web page: http://www.eui.eu/LAW/

    Related research

    Keywords: economic policy;

    References

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    1. Richard N. Langlois, 2001. "The Vanishing Hand: the Changing Dynamics of Industrial Capitalism," Economic History, EconWPA 0110001, EconWPA.
    2. Fabrizio Cafaggi, 2008. "Contractual Networks and the Small Business Act: Towards European Principles?," EUI-LAW Working Papers, European University Institute (EUI), Department of Law 15, European University Institute (EUI), Department of Law.
    3. Benito Arrunada, 2000. "The Quasi-Judicial Role of Large Retailers : An Efficiency Hypothesis of their Relation with Suppliers," Revue d'Économie Industrielle, Programme National Persée, vol. 92(1), pages 277-296.
    4. Eleonora Di Maria & Stefano Micelli, 2007. "District leaders as open networks: emerging business strategies in Italian industrial districts," "Marco Fanno" Working Papers 0038, Dipartimento di Scienze Economiche "Marco Fanno".
    5. Claude Menard, 2006. "Hybrid organization of production and distribution," Revista de Analisis Economico – Economic Analysis Review, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines, vol. 21(2), pages 25-41, December.
    6. Helper, Susan & MacDuffie, John Paul & Sabel, Charles, 2000. "Pragmatic Collaborations: Advancing Knowledge While Controlling Opportunism," Industrial and Corporate Change, Oxford University Press, vol. 9(3), pages 443-87, September.
    7. Rachael E. Goodhue & Dale M. Heien & Hyunok Lee & Daniel A. Sumner, 2003. "Contracts and Quality in the California Winegrape Industry," Review of Industrial Organization, Springer, vol. 23(3_4), pages 267-282, December.
    8. Langlois, Richard N., 2002. "Modularity in technology and organization," Journal of Economic Behavior & Organization, Elsevier, vol. 49(1), pages 19-37, September.
    9. Richardson, G B, 1972. "The Organisation of Industry," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 82(327), pages 883-96, September.
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