Objectiveness in the Market for Third-Party Certification: Does market structure matter?
The globalization of trade in high quality foods is stimulating the development of international food standards and certification systems. Third-party certification as evolved as a means of ensuring that product information and signals on quality and safety attributes are sound and reliable. Certification can only provide credible market signals if it operates objectively and independently. This paper investigates the potential trade-off between certifiers objectivity and the level of competition in the rapidly expanding market for third-party certification of quality foods. Based on a theoretical supply chain framework a nested panel analysis is applied to a set of accredited certifiers for the EurepGAP fruits and vegetables standard. Our results indicate that increasing economies of scale and market share in certification do matter.
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