Sustainability Standards and the Reorganization of Private Label Supply Chains: A Transaction Cost Perspective
Private standards are among the main measures that can be implemented to differentiate food production. Retailers have been particularly active in setting food safety and quality systems for the development of their private labels. The purpose of this paper is to identify the effects of introducing measures that guarantee the environmental sustainability of food production on vertical dyadic relations. We focus our attention on the adoption of integrated pest management (IPM) systems that are designed by retailers to support private label products, with the aim of studying how these systems affect the governance structure of transactions between retailer and farmer/processor. Transaction cost analysis is used as theoretical framework to assess changes in vertical coordination after the adoption of an IPM system. Four case studies related to food retailers in Italy were analyzed to identify changes in transaction characteristics, costs, and governance that are related to the adoption of this system. The results show that the introduction of an IPM system leads to an increase of transaction asset specificity ( i.e. , especially of human and material asset specificity) among the agents of the supply chain, and a decrease of the degree of transaction uncertainty. The variations in transaction characteristics determine changes in transaction costs. These changes lead to new hybrid forms of transaction governance, namely dyadic contracts, and a centralized organization of vertical relationships.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Masten, Scott E & Meehan, James W, Jr & Snyder, Edward A, 1991. "The Costs of Organization," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(1), pages 1-25, Spring.
- Claude Ménard & Peter G. Klein, 2004.
"Organizational Issues in the Agrifood Sector: Toward a Comparative Approach,"
- Claude Ménard & Peter G. Klein, 2004. "Organizational Issues in the Agrifood Sector: Toward a Comparative Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(3), pages 750-755.
- Oliver E. Williamson, 2002. "The Theory of the Firm as Governance Structure: From Choice to Contract," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 171-195, Summer.
- Hrubovcak, James & Vasavada, Utpal & Aldy, Joseph E., 1999. "Green Technologies for a More Sustainable Agriculture," Agricultural Information Bulletins 33721, United States Department of Agriculture, Economic Research Service.
- Manuel Gonzalez-Diaz & Marta Fernandez Barcala & Benito Arrunada, 2003.
"Quality assurance mechanisms in agrifood: the case of the Spanish fresh meat sector,"
International Journal of Agricultural Resources, Governance and Ecology,
Inderscience Enterprises Ltd, vol. 2(3/4), pages 361-382.
- Manuel González-Díaz & Marta Fernández-Barcala & Benito Arruñada, 2001. "Quality assurance mechanisms in agrifood: The case of the Spanish fresh meat sector," Economics Working Papers 637, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2002.
- Souza Monteiro, Diogo M. & Caswell, Julie A., 2006.
"Traceability Adoption at the Farm Level: An Empirical Analysis of the Portuguese Pear Industry,"
2006 Annual meeting, July 23-26, Long Beach, CA
21132, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Souza Monteiro, Diogo M. & Caswell, Julie A., 2009. "Traceability adoption at the farm level: An empirical analysis of the Portuguese pear industry," Food Policy, Elsevier, vol. 34(1), pages 94-101, February.
- Elizabeth M. M. Q. Farina & Thomas Reardon, 2000. "Agrifood Grades and Standards in the Extended Mercosur: Their Role in the Changing Agrifood System," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(5), pages 1170-1176.
- Banterle, Alessandro & Souza Monteiro, Diogo M. & Stranieri, Stefanella, 2009. "Does traceability play a role in retailer’s strategies for private labels?," 83rd Annual Conference, March 30-April 1, 2009, Dublin, Ireland 50933, Agricultural Economics Society.
- Anne Rozan & Anne Stenger-Letheux & Marc Willinger, 2004.
"Willingness-to-pay for food safety : an experimental investigation of quality certification on bidding behavior,"
155498, Institut National de la Recherche Agronomique, France.
- Anne Rozan & Anne Stenger & Marc Willinger, 2004. "Willingness-to-pay for food safety: An experimental investigation of quality certification on bidding behaviour," Framed Field Experiments 00197, The Field Experiments Website.
- North, Douglass C, 1994.
"Economic Performance through Time,"
American Economic Review,
American Economic Association, vol. 84(3), pages 359-68, June.
- Klaus G. Grunert, 2005. "Food quality and safety: consumer perception and demand," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 32(3), pages 369-391, September.
- Banterle, Alessandro & Stranieri, Stefanella, 2008. "The consequences of voluntary traceability system for supply chain relationships. An application of transaction cost economics," Food Policy, Elsevier, vol. 33(6), pages 560-569, December.
- Gómez-Limón, José A. & Sanchez-Fernandez, Gabriela, 2010. "Empirical evaluation of agricultural sustainability using composite indicators," Ecological Economics, Elsevier, vol. 69(5), pages 1062-1075, March.
- Erin Anderson, 2008. "The Salesperson as Outside Agent or Employee: A Transaction Cost Analysis," Marketing Science, INFORMS, vol. 27(1), pages 70-84, 01-02.
- Christian Fischer & Monika Hartmann & Nikolai Reynolds & Philip Leat & César Revoredo-Giha & Maeve Henchion & Luis Miguel Albisu & Azucena Gracia, 2009. "Factors influencing contractual choice and sustainable relationships in European agri-food supply chains," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 36(4), pages 541-569, December.
- Golan, Elise H. & Kuchler, Fred & Mitchell, Lorraine, 2000. "Economics Of Food Labeling," Agricultural Economics Reports 34069, United States Department of Agriculture, Economic Research Service.
- Anne Rozan, 2004. "Willingness-to-pay for food safety: an experimental investigation of quality certification on bidding behaviour," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 31(4), pages 409-425, December.
- Wim Verbeke, 2005. "Agriculture and the food industry in the information age," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 32(3), pages 347-368, September.
When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:5:y:2013:i:12:p:5272-5288:d:31144. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (XML Conversion Team)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.