IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v5y2013i12p5272-5288d31144.html
   My bibliography  Save this article

Sustainability Standards and the Reorganization of Private Label Supply Chains: A Transaction Cost Perspective

Author

Listed:
  • Alessandro Banterle

    (Department of Economics, Management and Quantitative Methods, Università degli Studi di Milano, Via Celoria 2, Milan 20133, Italy)

  • Stefanella Stranieri

    (Department of Economics, Management and Quantitative Methods, Università degli Studi di Milano, Via Celoria 2, Milan 20133, Italy)

Abstract

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.

Suggested Citation

  • Alessandro Banterle & Stefanella Stranieri, 2013. "Sustainability Standards and the Reorganization of Private Label Supply Chains: A Transaction Cost Perspective," Sustainability, MDPI, vol. 5(12), pages 1-17, December.
    • Handle: RePEc:gam:jsusta:v:5:y:2013:i:12:p:5272-5288:d:31144
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/5/12/5272/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/5/12/5272/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Joskow, Paul L, 1988. "Asset Specificity and the Structure of Vertical Relationships: Empirical Evidence," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 4(1), pages 95-117, Spring.
    3. Tina L. Saitone & Richard J. Sexton, 2010. "Product Differentiation and Quality in Food Markets: Industrial Organization Implications," Annual Review of Resource Economics, Annual Reviews, vol. 2(1), pages 341-368, October.
    4. 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.
    5. repec:dau:papers:123456789/2722 is not listed on IDEAS
    6. 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, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 36(4), pages 541-569, December.
    7. 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.
    8. 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.
    9. Henson, Spencer & Reardon, Thomas, 2005. "Private agri-food standards: Implications for food policy and the agri-food system," Food Policy, Elsevier, vol. 30(3), pages 241-253, June.
    10. 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.
    11. Masten, Scott E & Meehan, James W, Jr & Snyder, Edward A, 1991. "The Costs of Organization," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(1), pages 1-25, Spring.
    12. 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.
    13. Wim Verbeke, 2005. "Agriculture and the food industry in the information age," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 32(3), pages 347-368, September.
    14. 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.
    15. Claude Ménard, 2005. "New institutions for governing the agri-food industry," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 32(3), pages 421-440, September.
    16. Williamson, Oliver, 2009. "The Theory of the Firm as Governance Structure: From Choice to Contract," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 6, pages 111-134, December.
    17. Anne Rozan, 2004. "Willingness-to-pay for food safety: an experimental investigation of quality certification on bidding behaviour," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 31(4), pages 409-425, December.
    18. North, Douglass C, 1994. "Economic Performance through Time," American Economic Review, American Economic Association, vol. 84(3), pages 359-368, June.
    19. Golan, Elise H. & Kuchler, Fred & Mitchell, Lorraine, 2000. "Economics Of Food Labeling," Agricultural Economic Reports 34069, United States Department of Agriculture, Economic Research Service.
    20. 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.
    21. Hatanaka, Maki & Bain, Carmen & Busch, Lawrence, 2005. "Third-party certification in the global agrifood system," Food Policy, Elsevier, vol. 30(3), pages 354-369, June.
    22. Loureiro, Maria L. & Umberger, Wendy J., 2007. "A choice experiment model for beef: What US consumer responses tell us about relative preferences for food safety, country-of-origin labeling and traceability," Food Policy, Elsevier, vol. 32(4), pages 496-514, August.
    23. Fulponi, Linda, 2006. "Private voluntary standards in the food system: The perspective of major food retailers in OECD countries," Food Policy, Elsevier, vol. 31(1), pages 1-13, February.
    24. 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.
    25. Foss, Nicolai & Mahnke, Volker (ed.), 2000. "Competence, Governance, and Entrepreneurship: Advances in Economic Strategy Research," OUP Catalogue, Oxford University Press, number 9780198297178.
    26. Ji, Chen & de Felipe, Isabel & Briz, Julian & Trienekens, Jacques H., 2012. "An Empirical Study on Governance Structure Choices in China´s Pork Supply Chain," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(2), pages 1-32, May.
    27. Michael J. Leiblein & Douglas J. Miller, 2003. "An empirical examination of transaction‐ and firm‐level influences on the vertical boundaries of the firm," Strategic Management Journal, Wiley Blackwell, vol. 24(9), pages 839-859, September.
    28. Klaus G. Grunert, 2005. "Food quality and safety: consumer perception and demand," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 32(3), pages 369-391, September.
    29. 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.
    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. Shengnan Sun & Xinping Wang & Yan Zhang, 2017. "Sustainable Traceability in the Food Supply Chain: The Impact of Consumer Willingness to Pay," Sustainability, MDPI, vol. 9(6), pages 1-19, June.
    2. Claudio Soregaroli & Alessandro Varacca & Elena Claire Ricci & Silvia Platoni & Pascal Tillie & Stefanella Stranieri, 2022. "Voluntary standards as meso‐institutions: A Bayesian investigation of their relationships with transaction governance and risks," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(4), pages 1660-1681, December.
    3. Hobbs, J., 2018. "Transaction Costs, Institutions and the Organization of Supply Chains: Three Good Questions," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277411, International Association of Agricultural Economists.
    4. Stranieri, S. & Cavaliere, A. & Banterle, A., 2015. "Voluntary traceability standards: which is the role of economic incentives?," 2015 International European Forum (144th EAAE Seminar), February 9-13, 2015, Innsbruck-Igls, Austria 206213, International European Forum on System Dynamics and Innovation in Food Networks.
    5. Marianne Hubeau & Fleur Marchand & Guido Van Huylenbroeck, 2017. "Sustainability Experiments in the Agri-Food System: Uncovering the Factors of New Governance and Collaboration Success," Sustainability, MDPI, vol. 9(6), pages 1-23, June.
    6. Junyi Zhong & Jiazhen Huo, 2022. "Impacts of Power Structure on Introduction of Green Store Brand," Sustainability, MDPI, vol. 14(19), pages 1-33, September.
    7. Oliver Maaß & Philipp Grundmann, 2018. "Governing Transactions and Interdependences between Linked Value Chains in a Circular Economy: The Case of Wastewater Reuse in Braunschweig (Germany)," Sustainability, MDPI, vol. 10(4), pages 1-29, April.
    8. Weituschat, Chiara Sophia & Pascucci, Stefano & Materia, Valentina Cristiana & Caracciolo, Francesco, 2023. "Can contract farming support sustainable intensification in agri-food value chains?," Ecological Economics, Elsevier, vol. 211(C).
    9. Fang, Yingkai & Asche, Frank & Gao, Zhifeng, 2020. "Can ecolabel certifications for restaurants influence consumer choices away from home?," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304268, Agricultural and Applied Economics Association.
    10. Elena Castellari & Elena Claire Ricci & Stefanella Stranieri & Stephan S. Marette & Martina Sarnataro & Claudio Soregaroli, 2019. "Relationships Between Health and Environmental Information on the Willingness to Pay for Functional Foods: The Case of a New Aloe Vera Based Product [Impact de l’information sur la santé et l'envir," Post-Print hal-02627431, HAL.
    11. Ricci, Elena Claire & Banterle, Alessandro & Stranieri, Stefanella, 2018. "Trust to Go Green: An Exploration of Consumer Intentions for Eco-friendly Convenience Food," Ecological Economics, Elsevier, vol. 148(C), pages 54-65.

    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. Russo, Carlo & Perito, Maria Angel & Di Fonzo, Antonella, 2014. "The Strategic Use of Private Food Safety Standards to Manage Complexity: a Moral Hazard Perspective," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182795, European Association of Agricultural Economists.
    2. Irz, Xavier & Mazzocchi, Mario & Réquillart, Vincent & Soler, Louis-Georges, 2015. "Research in Food Economics: past trends and new challenges," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 96(01), pages 187-237, March.
    3. Jan Mei Soon & Richard N. Baines, 2013. "Public and Private Food Safety Standards: Facilitating or Frustrating Fresh Produce Growers?," Laws, MDPI, vol. 2(1), pages 1-19, January.
    4. Eric Giraud-Héraud & Cristina Grazia & Abdelhakim Hammoudi, 2012. "Explaining the Emergence of Private Standards in Food Supply Chains," Working Papers hal-00749345, HAL.
    5. 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.
    6. Stranieri, S. & Soregaroli, C. & Platoni, S., 2018. "Voluntary standards as transaction governance: drivers of adoption for non-GMO certification in Europe," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277391, International Association of Agricultural Economists.
    7. Russo, Carlo & Perito, Maria Angela & Di Fonzo, Antonella, 2011. "Our products are safe (don't tell anyone!). Why don't supermarkets advertise their private food safety standards?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 115987, European Association of Agricultural Economists.
    8. Russo, Carlo & Perito, Maria Angela & Di Fonzo, Antonella, 2014. "Using Private Food Safety Standards to Manage Complexity: A Moral Hazard Perspective," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 15(2), pages 1-15.
    9. Maria Aguiar Fontes & Eric Giraud-Héraud & Alexandra Seabra Pinto, 2013. "Consumers' behaviour towards food safety: A litterature review," Working Papers hal-00912476, HAL.
    10. Dervillé, Marie & Allaire, Gilles, 2014. "Change of competition regime and regional innovative capacities: Evidence from dairy restructuring in France," Food Policy, Elsevier, vol. 49(P1), pages 347-360.
    11. Martino, Gaetano & Bavorovà, Miroslava, 2014. "An Analysis of Food Safety Private Investments Drivers in the Italian Meat Sector," 2014 International European Forum, February 17-21, 2014, Innsbruck-Igls, Austria 199366, International European Forum on System Dynamics and Innovation in Food Networks.
    12. 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.
    13. 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.
    14. Belton, Ben & Haque, Mohammad Mahfujul & Little, David C. & Sinh, Le Xuan, 2011. "Certifying catfish in Vietnam and Bangladesh: Who will make the grade and will it matter?," Food Policy, Elsevier, vol. 36(2), pages 289-299, April.
    15. Hugh Campbell & Anne Murcott & Angela MacKenzie, 2011. "Kosher in New York City, halal in Aquitaine: challenging the relationship between neoliberalism and food auditing," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 28(1), pages 67-79, February.
    16. Fabio Boncinelli & Francesca Gerini & Benedetta Neri & Leonardo Casini, 2018. "Consumer willingness to pay for non‐mandatory indication of the fish catch zone," Agribusiness, John Wiley & Sons, Ltd., vol. 34(4), pages 728-741, October.
    17. Bailey, Alison P. & Garforth, Chris, 2014. "An industry viewpoint on the role of farm assurance in delivering food safety to the consumer: The case of the dairy sector of England and Wales," Food Policy, Elsevier, vol. 45(C), pages 14-24.
    18. Angelo Frascarelli & Stefano Ciliberti & Gustavo Magalhães de Oliveira & Gabriele Chiodini & Gaetano Martino, 2021. "Production Contracts and Food Quality: A Transaction Cost Analysis for the Italian Durum Wheat Sector," Sustainability, MDPI, vol. 13(5), pages 1-12, March.
    19. Neda Trifković, 2014. "Food Standards and Vertical Coordination in Aquaculture: The Case of Pangasius from Vietnam," IFRO Working Paper 2014/01, University of Copenhagen, Department of Food and Resource Economics.
    20. repec:dau:papers:123456789/2412 is not listed on IDEAS
    21. Christian Balcells, 2022. "Determinants of firm boundaries and organizational performance: an empirical investigation of the Chilean truck market," Journal of Evolutionary Economics, Springer, vol. 32(2), pages 423-461, April.

    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:gam:jsusta:v:5:y:2013:i:12:p:5272-5288:d:31144. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.