Integrative role of value chain governance: evidence from the malt barley value chain in Ethiopia

Abstract

Past studies did not fully address how value chain governance mechanisms and transaction attributes influence value chain integration. The paper, hence, investigates how value chain governance mechanisms (i.e. relational and contractual) and transaction attributes (i.e. dependency, asset specificity and uncertainty) correlate with chain integration. Survey data obtained from 320 farmers and 100 traders participating in the malt barley value chain in Ethiopia were used for the study. In addition, interview responses from 64 selected members of the chain were used for data triangulation. Descriptive statistics and ordered logistic regression were used for data analysis. The study highlights the following key findings: (a) the use of contract relates positively to value chain integration at all interfaces except at the traders-malt factory interface; (b) trust correlates positively with value chain integration at all interfaces; and (c) asset specificity relates negatively to value chain integration at the farmer–trader interface based on traders' survey data, while dependency and uncertainty relate positively to value chain integration at some of the studied interfaces. Copyright © 2016 The Institute of Brewing & Distilling