How do transaction costs, capabilities and networks influence the procurement strategies of small agri-food firms? Evidence from the wine industry

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bruno Varella Miranda ◽  
Brent Ross ◽  
Jason Franken ◽  
Miguel Gómez
Keyword(s):  
New York ◽  
Transaction Costs ◽  
Small Firms ◽  
Probit Model ◽  
Wine Industry ◽  
Implicit Assumption ◽  
Governance Mechanism ◽  
Truncated Regression ◽  
Content Type ◽  
Procurement Strategies

PurposeThe purpose of this study is to disentangle the drivers of adoption of procurement strategies in situations where small agri-food firms deal with constrained organizational choices. More specifically, the authors investigate the role of transaction costs, capabilities and networks in the definition of feasible “make-or-buy” choices in emerging wine regions.Design/methodology/approachThis article analyzes a unique dataset of small wineries from five US states: Illinois, Michigan, Missouri, New York and Vermont. The reported results derive from both a hurdle model (i.e. a probit model and a truncated regression model) and a tobit model.FindingsThe results suggest the importance of trust as a replacement for formal governance structures whenever small firms deal with highly constrained sets of organizational choices. On the other hand, the level of dependence on a limited mix of winegrape varieties and the perception that these varieties are fundamental in building legitimacy help to explain higher rates of vertical integration.Originality/valueThis study is important because it sheds light on organizational constraints that affect millions of farmers across the globe. The study of “make-or-buy” decisions in agri-food supply chains has mostly relied on the implicit assumption that all organizational choices are available to every firm. Nevertheless, limited capabilities and the participation in low-density networks may constrain the ability of a firm to adopt a governance mechanism. Stated organizational preferences and actual organizational choices may thus differ.

The strategic choice of contract types in business process outsourcing

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ling Ge ◽  
Xiaoyan Wang ◽  
Zhilin Yang
Keyword(s):  
Transaction Costs ◽  
Business Process ◽  
Strategic Choice ◽  
Probit Model ◽  
Major Theme ◽  
Direct Impact ◽  
Business Process Outsourcing ◽  
Content Type ◽  
Coordination Costs ◽  
Adaptation Costs

PurposeHow to determine the appropriate contractual structure for an outsourcing relationship has been a major theme in the business process outsourcing (BPO) literature. Drawing on transaction cost economics, this study aims to examine how anticipated coordination and adaptation costs in a BPO relationship affect the choice of contract types. Specifically, this research categorizes contracts types (fixed-price, time and materials and hybrid contracts) based on levels of contract design comprehensiveness and flexibility to change.Design/methodology/approachThe research setting is the BPO for a focal firm, involving a contractor. Data from 153 US companies are collected using a structured questionnaire on senior executives of functional areas of marketing, IT and finance. Hypotheses were tested using ordered probit model.FindingsThe results show that maturity is negatively associated with anticipated adaptation costs, while modularity and IT detachability are negatively related to anticipated coordination costs. Furthermore, adaptation costs have a direct impact on the choice, whereas the anticipated coordination costs do not have a significant direct impact on contract choice. The strength of adaptation costs' impact, however, is significantly reduced when coordination costs are high.Originality/valueThis study explicitly examines the role of anticipated coordination and adaptation costs in shaping the strategic choice of contract types in the BPO market. By differentiating the two types of anticipated transaction costs, this research enables a better understanding of the dynamics between transaction characteristics, anticipated transaction costs and contract types in complicated relationships such as BPO relationships.

Confronting the unprecedented: micro and small businesses in the age of coronavirus disease 2019

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Alessandro Bressan ◽  
Abel Duarte Alonso ◽  
Seng Kiat Kok
Keyword(s):  
Small Businesses ◽  
Design Methodology ◽  
Small Firms ◽  
Theory Of Planned Behaviour ◽  
Theoretical Framework ◽  
Wine Industry ◽  
Online Questionnaire ◽  
Content Type ◽  
Key Stakeholders

PurposeThe purpose of this study is to understand how micro and small firms are navigating through the coronavirus disease 2019 (COVID-19) threat, and the alternatives they are implementing to coexist with the ongoing crisis. To this end, Italy's socioeconomically and traditionally significant wine industry is examined. The study considers insights of the theory of planned behaviour (TPB) and develops a theoretical framework, which proposes various emerging theoretical dimensions, including proactiveness, support-reliance and resourcefulness.Design/methodology/approachWinery owners–managers were contacted and invited to partake in the study completing an online questionnaire. Overall, 167 useable responses were collected.FindingsWhile facing the loss of vital income through decreasing demand and exports, participants resort to exploiting various initiatives, including “reinventing” their firms. Their observations also recognise the vital supporting role of various key stakeholders, first and foremost family members, as well as clients and staff. Concerning how owners-managers envision managing their firm post-COVID-19, two predominant groups are identified, one strongly favouring modern-day alternatives, and the second committing to the firm's traditional business model. Overall, the different predictors of the TPB, namely attitude, subjective norms and perceived behavioural control emerged.Originality/valueThis study is one of the first that empirically analyses micro and small firms in a socioeconomically and traditionally significant industry during an unprecedented event. In addition, the proposed theoretical framework provides a roadmap and guide to examine, understand and assimilate the entrepreneurial journey through a devastating event.

Current assets management of small enterprises

2015 ◽  
Vol 42 (4) ◽  
pp. 549-560 ◽  
Author(s):  
Haitham Nobanee ◽  
Jaya Abraham
Keyword(s):  
New York ◽  
Small Firms ◽  
Stock Exchange ◽  
Dynamic Panel Data ◽  
Method Of Moment ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Trade Cycle ◽  
Content Type

Purpose – The purpose of this paper is to investigate the relationship between a firm’s net trade cycle, its size and liquidity. Design/methodology/approach – The relation between the firm’s net trade cycle and its liquidity is examined using Generalized Method of Moment Dynamic Panel-Data System Estimation with Robust Standard Errors for a sample of 5,802 US non-financial firms listed in the New York Stock Exchange, American Stock Exchange, NASDAQ Stock Market and Over the Counter Market for the period 1990-2004 (87,030 firm-year observations). The analysis is applied at the levels of the full sample and divisions of the sample by size. Findings – The results show negative and significant relationship between net trade cycle, as a comprehensive measure of efficiency in working capital management, and liquidity for small firms. Originality/value – Most of the existing literature focusses on the large firm’s experience of working capital management. Small firms generally face liquidity problems and have limited access to external capital, and studies on their efficiency in working capital management are scant. Thus the present study is useful in understanding the relation between the firm’s net trade cycle and liquidity of small firms.

scholarly journals A resource-based view of the firm and micro and small Italian wine firms

2016 ◽  
Vol 28 (4) ◽  
pp. 349-368 ◽  
Author(s):  
Abel Duarte Alonso ◽  
Alessandro Bressan
Keyword(s):  
Small Firms ◽  
Qualitative Data ◽  
Swot Analysis ◽  
Wine Industry ◽  
Small Enterprise ◽  
Online Questionnaire ◽  
Resource Based View ◽  
Content Type ◽  
Sustained Competitive Advantage ◽  
Red Tape

Purpose The purpose of this paper is twofold. First, the resource-based view (RBV) of the firm is adopted to explore the most important resources among micro and small firms operating in Italy’s wine industry. Second, the study incorporates a SWOT analysis to examine perceived strengths, weaknesses, opportunities and threats based on the perceptions of owners and managers of these firms. Design/methodology/approach An online questionnaire was designed to gather both quantitative and qualitative data from Italian wineries; a total of 211 firms participated in the study. Findings Product quality, managerial/staff capabilities, knowledge, reputation, service quality and the territory/region emerge as most important resources, clearly aligning with the attributes of the RBV, namely, valuable, rare, imperfectly imitable and (non)substitutable resources. However, based on the RBV, the future-sustained competitive advantage is threatened by, among other factors, the firm’s finances, competition, red tape and the complexity of increasing sales. Originality/value Fundamentally, the research contributes to micro and small enterprise literature, and to the limited number of studies that have used the RBV of the firm in the context of micro and small wineries. This theoretical framework is used among wineries of one of the world’s leading wine producing nations. Some dimensions of this country’s wine industry have received limited academic attention. In addition, the study provides practical value in identifying resources, limitations, and threats at a time when micro and small wineries are seeking to develop or increase their international presence.

scholarly journals Capital market penalties to radical and incremental innovation

2019 ◽  
Vol 23 (2) ◽  
pp. 291-313 ◽  
Author(s):  
Daniel Stefan Hain ◽  
Jesper Lindgaard Christensen
Keyword(s):  
Small Firms ◽  
Probit Model ◽  
Radical Innovation ◽  
Incremental Innovation ◽  
Behavioral Characteristics ◽  
Firm Level ◽  
Content Type ◽  
External Finance ◽  
Innovation Activities ◽  
Negative Effect

Purpose The purpose of this paper is to investigate how access to financing for incremental as well as radical innovation activities is affected by firm-specific structural and behavioral characteristics. Design/methodology/approach Deploying a two-stage Heckman probit model on survey data spanning the period 2000–2013 and covering 1,169 firms, this paper analyzes the effect of a firm’s engagement in incremental and radical innovation on its likelihood to get constrained in their access to external finance, and how this effect is moderated by the firm’s age and size. Findings In line with earlier research, it is confirmed that the type of innovation matters for the access to external finance, but in a more nuanced way than generally portrayed. While incremental innovation activities have little negative effect on the access to external finance, radical innovation activities tend to be penalized by capital markets. This effect appears to be particularly strong for small firms. Originality/value This paper provides nuanced insights into the interplay between types of firm-level innovation activities, structural characteristic and access to external finance.

Stock price discreteness and clustering: decimals and ordered probit model

2014 ◽  
Vol 22 (1) ◽  
pp. 49-60
Author(s):  
Haksoon Kim
Keyword(s):  
Firm Size ◽  
Stock Price ◽  
Design Methodology ◽  
Small Firms ◽  
Probit Model ◽  
Ordered Probit ◽  
Ordered Probit Model ◽  
Large Firms ◽  
Content Type ◽  
Explanatory Variables

Purpose – The purpose of this paper is to revisit the ordered probit model of Hausman et al. after the NYSE decimalization. Design/methodology/approach – The changed ordered probit model. Findings – The model can somewhat capture the different impact of trading-related “explanatory” variables on price changes among three different decimals but does not explain much about price discreteness and irregular transaction intervals among the existing models of stock price discreteness. Overall 1/16th and 1/24th range of the dependent variable is better explained by trading-related explanatory variables than 1/8th range of the dependent variable for small firms and there is not much difference in large firms among three decimals. The results imply that finer specification in decimalization and smaller firm size matters in trading after the decimalization project. Originality/value – First paper to revisit the ordered probit model of Hausman et al. after the NYSE decimalization.

Red, white and green: environmental communication on wine bottle labels from New York's Hudson River Region

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kevin Visconti
Keyword(s):  
New York ◽  
Hudson River ◽  
The United States ◽  
Environmental Communication ◽  
Local Economy ◽  
Communication Strategy ◽  
Wine Industry ◽  
Content Type ◽  
River Region ◽  
Wine Bottle

PurposeNew York is the third top wine producing state in America. Competitive wine production across the United States has challenged New York winemakers to secure a place in the domestic market in order to support the long-term viability of the local economy. As businesses of agriculture become increasingly disrupted by the changing natural environment and consumer demand for sustainable products grows, vintners may distinguish themselves through the production and promotion of strategic initiatives on wine bottle labels.Design/methodology/approachFueled by the distinct fields of green marketing and environmental communication, this research investigates the promotion of sustainable practices on wine bottle labels. Through the methodology of content analysis, this project examines all 13 wineries on the Shawangunk Wine Trail located in the Hudson River Region of New York.FindingsThe findings from this study show that less than half of wineries in the sample selection employ environmental marketing as a communication strategy.Research limitations/implicationsThis research carries practical, business and social implications for the local Hudson River Region, the larger New York wine industry, and any organization looking to remain viable in a competitive marketplace.Originality/valueThis paper reveals the potential for the Hudson River Region wine industry to promote its “distinctive” and “innovative” environmental philosophy of “terroir driven and sustainably produced” winemaking on wine bottle labels to differentiate themselves in a crowded and expanding marketplace and build a Basis of Legitimacy with consumers.

scholarly journals Micro and small business innovation in a traditional industry

2016 ◽  
Vol 8 (4) ◽  
pp. 311-330 ◽  
Author(s):  
Abel Duarte Alonso ◽  
Alessandro Bressan
Keyword(s):  
Small Business ◽  
Small Firms ◽  
Academic Research ◽  
Global Scale ◽  
Wine Industry ◽  
Online Questionnaire ◽  
Wine Production ◽  
Content Type ◽  
Traditional Industry ◽  
New Consumer

Purpose The purpose of this paper is to explore innovation among micro and small business operators in Italy’s wine industry. Moreover, in adopting the theory of innovation, the study examines winery operators’ perceptions on innovation, ways in which wineries are innovating and whether participants’ responses vary based on demographic characteristics. Design/methodology/approach An online questionnaire designed for this study gathered the responses of 211 participants, composed by owners, winemakers, directors and business partners. Findings Innovation is fundamentally associated with minimising ecological footprint, investments, making improvements in the winery, adapting to trends and new consumer demands and, importantly, with maintaining traditions while enhancing the quality of the wines. Further, participants primarily agree with involvement in wine tourism and adoption of social media as predominant forms of innovating. Several inter-group differences particularly based on levels of wine production and size of the winery emerged. Overall, the findings align with the dimensions of the theory of innovation, namely, benefits, costs, resources and discounting factors. Originality/value Despite the significance of Italy’s wine industry, in terms of exports and consumption on a global scale, academic research focusing on this industry’s innovative practices has been limited. Similarly, there is scant research on innovation among micro and small firms, or on industries relevant to countries’ socio-economic capital. This exploratory study provides an element of originality and value, exploring and contributing to the literature on these under-researched areas.

scholarly journals Cooperation in R&D, firm size and type of partnership

2017 ◽  
Vol 26 (1) ◽  
pp. 123-143 ◽  
Author(s):  
Erika Raquel Badillo ◽  
Francisco Llorente Galera ◽  
Rosina Moreno Serrano
Keyword(s):  
Technological Innovation ◽  
Automotive Industry ◽  
Automobile Industry ◽  
Small Firms ◽  
Probit Model ◽  
Content Type ◽  
Bivariate Probit Model ◽  
Simultaneous Choice ◽  
External Actors ◽  
National Governments

Purpose The purpose of this paper is to analyse cooperation in R&D in the automobile industry in Spain. It first examines to what extent firms cooperate with external actors in the field of technological innovation, and if so, with what type of cooperation partner, paying special attention to the differentiation according to the size of the firms. Second, it aims to study how the firm’s size may affect not only the decision of cooperating but also with which type of partner. Design/methodology/approach The data in this study came from the surveys done in 2010 and 2013 by the Technological Innovation Panel (PITEC) for firms in the automotive industry. The paper estimates a bivariate probit model that takes into account the two types of cooperation mostly present in such an industry, vertical and institutional, explicitly considering the interdependencies that may arise in their simultaneous choice. Findings The empirical study confirms that small firms cooperate less frequently than big firms and that giving more importance to information publicly available and having public financial support from local and national governments are important determinants of collaboration agreements, mainly in the case of customers and suppliers. Originality/value This paper contributes to the understanding of the motivations of the automotive industry for engaging in R&D cooperation agreements. The authors study how the firm’s size may affect not only the decision of cooperating but also with which type of partner.

scholarly journals Investigation on firm efficiency: evidence from selected Asia-Pacific countries

2018 ◽  
Vol 25 (8) ◽  
pp. 3062-3080 ◽  
Author(s):  
Khar Mang Tan ◽  
Fakarudin Kamarudin ◽  
Amin Noordin Bany-Ariffin ◽  
Norhuda Abdul Rahim
Keyword(s):  
Technical Efficiency ◽  
Small Firms ◽  
Banking Sector ◽  
Profit Maximization ◽  
Asia Pacific ◽  
Scale Efficiency ◽  
Scale Level ◽  
Firm Efficiency ◽  
Content Type ◽  
Parametric Data

Purpose The purpose of this paper is to examine the firm efficiency or technical efficiency (TE), pure technical efficiency (PTE) and scale efficiency (SE) in the selected developed and developing Asia-Pacific countries. Design/methodology/approach The sample consists of a sum of 700 firms in selected developed and developing Asia-Pacific countries over the period from 2009 to 2015. The non-parametric data envelopment analysis under the production approach is used to investigate firm efficiency. Findings On average, this paper discovers that the firms in selected Asia-Pacific countries are moderately efficient. Scale inefficiency (SIE) is found to be the dominant source of firms’ technical inefficiency. The analysis of return to scale shows that the large firms tend to operate at decreasing return to scale level, while the small firms tend to operate at increasing return to scale level. Practical implications The findings from this paper provide significant insights to the policy makers and firm managers in promoting the efficient firms of Asia-Pacific countries. Originality/value The present paper conducts a critical analysis on return to scale in the firms sector of Asia-Pacific context, which is ignored by the past studies on firm efficiency since the analysis of return to scale is mostly emphasized on banking sector. The precise nature of SIE is important for a firm to be efficient in achieving the firm’s primary goals of profit maximization and sustaining market competitiveness.

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