The Role of Coordination Mechanisms and Transaction Costs Promoting Sustainability Performance in Agri‐Food Supply Chains: Evidence From Ecuador

Social tensions and resource depletion pose significant challenges to the agri‐food sector, highlighting the need for coordinated strategies to ensure sustainability in supply chains. Despite its critical importance, the relationship between coordination mechanisms and sustainability performance remains underexplored. This study examines the interrelations between transactional characteristics, relational and formal coordination, and sustainability performance in agri‐food supply chains. By surveying 204 farmers and 135 downstream players across diverse supply chain arrangements, this research employs structural equation modeling and confirmatory factor analysis to analyze data suitability and test hypotheses. The empirical findings reveal nuanced relationships: relational governance has a significantly positive connection to economic and social sustainability within supply chains. There is also a positive, indirect relation between relational governance and ecological performance through the promotion of resource efficiency. Formal coordination practices facilitate strategic relationships and efficient resource allocation and as such connect to social and economic viability of supply chains. Transaction costs play a role as mediator between formal and relational coordination, and sustainability outcomes. Effective management of transaction costs can mitigate inefficiencies and foster collaborative efforts. By understanding these dynamics, policymakers and stakeholders can develop strategies to promote resilience and sustainability in global food systems.