IDEAS home Printed from https://ideas.repec.org/a/ags/ifaamr/330130.html
   My bibliography  Save this article

Too much power or no power: when does intermediary's power result into better wine and happier farmers?

Author

Listed:
  • Xhoxhi, Orjon
  • Imami, Drini
  • Hanf, Jon
  • Gjokaj, Ekrem

Abstract

The study analyzes the trading relationship performance between farmers and intermediaries and the factors shaping it, with a focus on intermediary’s power, based on a structured survey of vineyard farmers in Kosovo. Confirmatory factor analysis is employed to develop measures for the study latent variables, and ordinary least squares regression is used to test the hypothesis. To further validate the results, machine learning (i.e. random forest) is used to model the factors affecting the relationship performance between farmer and intermediary. The results show that when the intermediary has considerable (excessive) power, it leads to low trading relationship performance with farmers. Also, when the intermediary has little power, the relationship performance with farmers behaves in a similar way. The main contribution of this paper is to further illuminate the debate on the role of power in business-to-business relationships, in that it points out an alternative explanation; stating that there is an optimal level zone that power needs to exist, in order to achieve above average trading relationship performance. Outside this zone, either low or excessive/high intermediary’s power results in poor relationship performance.

Suggested Citation

  • Xhoxhi, Orjon & Imami, Drini & Hanf, Jon & Gjokaj, Ekrem, 2022. "Too much power or no power: when does intermediary's power result into better wine and happier farmers?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 25(5), December.
    • Handle: RePEc:ags:ifaamr:330130
    DOI: 10.22004/ag.econ.330130
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/330130/files/ifamr2021.0143.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.330130?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. 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;The Industrial Organization Society, vol. 23(3_4), pages 267-282, December.
    2. Felicetta Carillo & Francesco Caracciolo & Luigi Cembalo, 2017. "Do durum wheat producers benefit of vertical coordination?," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 5(1), pages 1-13, December.
    3. Matthew Gorton & John White & Svetlana Chernyshova & Alexander Skripnik & Tatiana Vinichenko & Mikhail Dumitrasco & Galina Soltan, 2003. "The reconfiguration of post-Soviet food industries: Evidence from Ukraine and Moldova," Agribusiness, John Wiley & Sons, Ltd., vol. 19(4), pages 409-424.
    4. Anna Carbone, 2021. "From Flasks to Fine Glasses: Recent Trends in Wine Economics," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 7(2), pages 187-198, July.
    5. Tina L. Saitone & Richard J. Sexton, 2017. "Agri-food supply chain: evolution and performance with conflicting consumer and societal demands," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 44(4), pages 634-657.
    6. Khemani, R S & Shapiro, Daniel M, 1993. "An Empirical Analysis of Canadian Merger Policy," Journal of Industrial Economics, Wiley Blackwell, vol. 41(2), pages 161-177, June.
    7. Valeria Sodano, 2006. "Power and the Analysis of the Food System," Department of Economics University of Siena 478, Department of Economics, University of Siena.
    8. Xhoxhi, Orjon & Pedersen, Søren Marcus & Lind, Kim Martin & Yazar, Attila, 2014. "The Determinants of Intermediaries’ Power over Farmers’ Margin-Related Activities: Evidence from Adana, Turkey," World Development, Elsevier, vol. 64(C), pages 815-827.
    9. Ashenfelter, Orley, 2010. "Predicting the Quality and Prices of Bordeaux Wine," Journal of Wine Economics, Cambridge University Press, vol. 5(1), pages 40-52, April.
    10. Jon Henrich Hanf & Erik Schweickert, 2012. "Power Play in the German Wine Business: Are German Wine Co-operatives able to Use their Power to manage their Business Relationships?," Journal of Economics and Behavioral Studies, AMH International, vol. 4(4), pages 227-238.
    11. Jon Henrich Hanf & Victoria Marquardt & Vardan Urutyan & Aram Babayan, 2016. "The impact of foreign direct investment on the agribusiness of transition countries: the example of the Armenian wine business," International Journal of Business and Globalisation, Inderscience Enterprises Ltd, vol. 16(4), pages 423-447.
    12. Daniel W. Apley & Jingyu Zhu, 2020. "Visualizing the effects of predictor variables in black box supervised learning models," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 82(4), pages 1059-1086, September.
    13. J. Carlos Jarillo, 1988. "On strategic networks," Strategic Management Journal, Wiley Blackwell, vol. 9(1), pages 31-41, January.
    14. Jon H. Hanf & Silva Atoyan & Linda Bitsch & Taras Gagalyuk, 2019. "Supply chain networks in the Armenian agribusiness: Setting a benchmark," Economia agro-alimentare, FrancoAngeli Editore, vol. 21(2), pages 359-378.
    15. Hans B. Thorelli, 1986. "Networks: Between markets and hierarchies," Strategic Management Journal, Wiley Blackwell, vol. 7(1), pages 37-51, January.
    16. Marta Fernández-Olmos & Jorge Rosell-Martínez & Manuel A. Espitia-Escuer, 2009. "Vertical integration in the wine industry: a transaction costs analysis on the Rioja DOCa," Agribusiness, John Wiley & Sons, Ltd., vol. 25(2), pages 231-250.
    17. Bitsch, Linda & Hanf, Jon H., 2022. "The perfect match: interpersonal relationships and their impact on chain management," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 25(3), March.
    18. Imami, Drini & Valentinov, Vladislav & Skreli, Engjell, 2021. "Food safety and value chain coordination in the context of a transition economy: The role of agricultural cooperatives," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 15(1), pages 21-34.
    19. Hanf, Jon Henrich & Pieniadz, Agata, 2007. "Quality Management in Supply Chain Networks - The Case of Poland," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 10(3), pages 1-27.
    20. Franken, Jason R.V., 2014. "Coordination of the California Winegrape Supply Chain," Journal of Wine Economics, Cambridge University Press, vol. 9(2), pages 183-201, August.
    21. Vera Belaya & Jon Henrich Hanf, 2016. "The dark and the bright side of power: implications for the management of business-to-business relationships," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 4(1), pages 1-17, December.
    22. Fabio R. Chaddad & Jason R.V. Franken & Miguel I. Gómez & R. Brent Ross, 2017. "Coordination of Winegrape Supply Chains in Emerging Markets," Agribusiness, John Wiley & Sons, Ltd., vol. 33(3), pages 289-301, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fiore, Mariantonietta & Sauvée, Loïc & Wiśniewska-Paluszak, Joanna, 2022. "Special Issue: Opportunities and challenges of EU farm-to-fork strategy," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 25(5), December.
    2. Engjell Skreli & Orjon Xhoxhi & Drini Imami & Klodjan Rama, 2024. "What explains collective action: The impact of social capital, incentive structures and economic benefits," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(3), pages 1622-1646, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bitsch, Linda & Hanf, Jon H., 2022. "The perfect match: interpersonal relationships and their impact on chain management," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 25(3), March.
    2. Miranda, Bruno & Chaddad, Fabio, 2016. "Transaction Costs, Capabilities, and Grape Procurement Strategies in U.S. Emerging Wine Regions," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235363, Agricultural and Applied Economics Association.
    3. Gagalyuk, Taras, 2012. "Goal achievement in supply chain networks: A study of the Ukrainian agri-food business," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 64, number 64.
    4. Michael Paul Kramer & Linda Bitsch & Jon Hanf, 2021. "Blockchain and Its Impacts on Agri-Food Supply Chain Network Management," Sustainability, MDPI, vol. 13(4), pages 1-22, February.
    5. Bruno V. Miranda & Brent Ross & Jason Franken & Miguel Gómez, 2022. "Plural forms and differentiation strategies in the agri‐food sector: Evidence from the U.S. wine industry," Agribusiness, John Wiley & Sons, Ltd., vol. 38(3), pages 486-504, July.
    6. Jon H. Hanf & Silva Atoyan & Linda Bitsch & Taras Gagalyuk, 2019. "Supply chain networks in the Armenian agribusiness: Setting a benchmark," Economia agro-alimentare, FrancoAngeli Editore, vol. 21(2), pages 359-378.
    7. Hanf, Jon & Gagalyuk, Taras, 2009. "Supply chain quality and its managerial challenges: Insights from Ukrainian agri-food business," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 14(4), pages 332-356.
    8. Jon Henrich Hanf & Erik Schweickert, 2012. "Power Play in the German Wine Business: Are German Wine Co-operatives able to Use their Power to manage their Business Relationships?," Journal of Economics and Behavioral Studies, AMH International, vol. 4(4), pages 227-238.
    9. Hätönen, Jussi & Eriksson, Taina, 2009. "30+Â years of research and practice of outsourcing - Exploring the past and anticipating the future," Journal of International Management, Elsevier, vol. 15(2), pages 142-155, June.
    10. Sturgeon, Timothy J., 1997. "Does Manufacturing Still Matter? The Organizational Delinking of Production from Innovation," UCAIS Berkeley Roundtable on the International Economy, Working Paper Series qt2g22d9d2, UCAIS Berkeley Roundtable on the International Economy, UC Berkeley.
    11. Laaksonen, Toni & Jarimo, Toni & Kulmala, Harri I., 2009. "Cooperative strategies in customer-supplier relationships: The role of interfirm trust," International Journal of Production Economics, Elsevier, vol. 120(1), pages 79-87, July.
    12. Karhu, Esa Kristian & Laine, Kalle & Ahola, Jyrki & Kotonen, Ulla, 2002. "Generating competitiveness through interfirm co-operation: the forest industry of South Karelia and small and medium size subcontracting companies," ERSA conference papers ersa02p192, European Regional Science Association.
    13. Andrea Larson & Jennifer A. Starr, 1993. "A Network Model of Organization Formation," Entrepreneurship Theory and Practice, , vol. 17(2), pages 5-15, January.
    14. Odd Jarl Borch & Morten Huse, 1993. "Informal Strategic Networks and the Board of Directors," Entrepreneurship Theory and Practice, , vol. 18(1), pages 23-36, October.
    15. Grégory Reyes, 2010. "Le groupement officinal, quels intérêts pour le pharmacien ?," Post-Print hal-01671390, HAL.
    16. Gagalyuk, Taras & Hanf, John, 2008. "Mission Impossible: Vertical Collaboration in Ukraine," BANWA: A Multidisciplinary Journal, University of the Philippines Mindanao, vol. 8(2), pages 1-12.
    17. Sophie Giordano & Elisabeth Roucolle, 2001. "Modele Comptable Et Representation Des Organisations En Reseau," Post-Print halshs-00584651, HAL.
    18. Halina Shmarlouskaya & Natallia Shalupayeva & Alina Danileviča & Alina Betlej & Ludmila Aleksejeva, 2021. "Foreign direct investment as a factor of trade development: cases of selected countries," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 9(2), pages 384-401, December.
    19. Ahlert, Klaus-Henning & Corsten, Hans & Gössinger, Ralf, 2009. "Capacity management in order-driven production networks--A flexibility-oriented approach to determine the size of a network capacity pool," International Journal of Production Economics, Elsevier, vol. 118(2), pages 430-441, April.
    20. Hu, Hanhui & Wan, Xing & Lv, Kui & Xu, Min, 2012. "Mapping China's 3G market with the strategic network paradigm," Telecommunications Policy, Elsevier, vol. 36(10), pages 977-988.

    More about this item

    Keywords

    Agribusiness;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ifaamr:330130. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/ifamaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.