Agro-food Firms Research Articles

Cross-Continental insights: Comparing food safety management systems in Europe and Latin America

This study investigates the implementation of Food Safety Management Systems (FSMSs) in agrofood firms across different regional contexts, focusing on the varying motivations behind their adoption in Europe and Latin America. The research aims to understand how these motivations influence the effectiveness of FSMSs in these distinct business environments. A questionnaire was administered to firms certified to the British Retail Consortium Global Standard for Food Safety (BRC-GS) in Spain and various Latin American countries. The data collected were analysed using multigroup structural equations modelling to examine the relationships between the firms' motivations and the degree of effective FSMS implementation in these regions.The findings highlight that the institutional environment significantly moderates these relationships. In the European context, ethical considerations play a crucial role in driving effective FSMS implementation. Conversely, in Latin America, commercial motivations are a more significant influence, with legitimacy reasons having a negative impact. This study is pioneering in its comparative analysis of FSMS implementation in European and Latin American agrofood firms. The insights gained contribute to understanding the behavioral dynamics of these firms within different economic and regulatory frameworks and offer a broader perspective on the evolution of food safety practices. This research has implications for policymakers and industry stakeholders in developing strategies tailored to regional characteristics and motivations.

Financing Gap of Agro-food Firms and the Role of Policies

The objective of this paper is to evaluate the position and financing needs of agri-food industry in Slovakia. There is a growth of agri-food sector which is reflected in growing demand for finance. Despite current favourable conditions on the financial market in Slovakia, some viable firms still face a credit constraint. Financing gap exists due to relatively high interest rates for some firms and due to their lack of sufficient collateral. Based on the survey results and focus group meetings we estimate the financing gap. Results show that there is potential for a further expansion of the financing market, with a financing gap estimated at EUR 36.8 mil. Small firms suffer the most from the financing gap and they constitute 77.4% of the gap. Financing gap and financing needs will be growing in the future. Firms need to increase investment to stay competitive on the market and need to adopt to changes in consumer preferences. This requires further investment into new technology and equipment. Tougher environmental requirements make firms invest into more environmentally friendly production processes. Furthermore, the sector is expected to be growing in the future. Financial instruments in the form of loan guarantees and interest rate subsidies would partly eliminate the existing financing gap. Small firms would benefit from simple and flexible financial instruments serving as guarantees for loans. Large firms would benefit from long-term loans supported by financial instruments. Policy-makers should place special attention on the use of financial instruments in agri-food sub-sectors with potential high value added and high employment.

Impact of Innovation Type on Financial and Non-financial Performance of SMES. A Scoping Review

To take advantage of existing opportunities in a market of global competition and rapid changes, firms try to adapt their strategy by introducing new or improved innovation types. While there is a large body of literature investigating the relationship between innovation and performance, there is a need to further analyze the role of innovation type on performance, especially in SMEs. Using a scoping review approach, this study aims to evaluate the influence of innovation types on firm performance in SMEs. A total of 47 studies were selected to examine the correlation between innovation type and performance, and identify the key factors that strongly impact the firm growth per industry. Findings demonstrate the difference in innovation impact according to the targeted industrial sector and show which type could be more beneficial to enhance firm performance. In the most studied industries, results reveal that product innovation influences strongly firm performance in the manufacturing sector, while marketing and product innovation are the variables that most impact the growth of agro-food firms. Similarly, organizational and product innovation affect highly firm improvement in the manufacturing and service sectors. This study helps managers in their struggle to obtain growth by targeting the most appropriate dimensions of innovation and helps policy makers by making decisions that stimulate firm development.

Does supply chain quality integration guarantee ambidexterity? Contingency and configuration perspectives on their relationships

While researchers have thoroughly investigated the impact of supply chain quality integration (SCQI) on competitive performance, they have paid less attention to its possible effects on a firm’s capabilities to reconfigure resources to adapt to environmental changes. Using data from 239 Spanish organic agro-food firms, we studied the relationships between SCQI dimensions and organisational ambidexterity from both contingency and configuration perspectives. In the contingency approach, a structural equation model was used to study the effect of individual SCQI dimensions on ambidexterity. In contrast, in the configuration perspective, cluster analysis and analysis of variance were used to investigate the relationship between SCQI patterns and ambidexterity. The contingency approach´s findings suggest that only internal quality integration has a positive direct impact on ambidexterity. The configuration approach complements such outcomes by revealing that only a high and balanced level of all the three SCQI dimensions (i.e. internal-, supplier- and customer-quality integration) guarantees significantly higher levels of ambidexterity. This paper provides a deeper understanding of the impact of SCQI on the firm's ambidexterity capability, and the findings offer managers of the organic agro-food industry some guidelines to develop an ambidexterity capability through SCQI to compete with the traditional agro-food players.

Comparison of Fuzzy Multi-Criteria Decision-Making Methods to Rank Business Strategies and Marketing Resources

Given the growing competition in domestic and international agricultural product markets, choosing a business strategy compatible with requirements of marketing resources can guide agro-food firms to maintain and enhance competitive advantages. However, this is not as simple as it seems because the decision-making criteria expressed in a fuzzy manner and the relationship between them can be hierarchical or network-based. Therefore, the main goal of this study was to select the most suitable business strategy and to prioritize marketing resources for one of the major agro-food firms in Iran. To ensure the robustness of the results, both fuzzy analytic hierarchy process (AHP) and fuzzy analytic network process (ANP) were applied to prioritize business strategies and marketing resources. The results of both methods revealed that the differentiation strategy had the highest priority in terms of the experts' viewpoints. The results also showed that managerial and customer relationship capabilities were the most important criteria in selecting the differentiation strategy. According to the findings of the study, for the successful implementation of the differentiation strategy, company managers are recommended to take the following three main elements into huge consideration: financial conditions, paying attention to customer’s needs and requirements, and the introduction of new products and services.

Comparison of Fuzzy Multi-Criteria Decision-Making Methods to Rank Business Strategies and Marketing Resources

Given the growing competition in domestic and international agricultural product markets, choosing a business strategy compatible with requirements of marketing resources can guide agro-food firms to maintain and enhance competitive advantages. However, this is not as simple as it seems because the decision-making criteria expressed in a fuzzy manner and the relationship between them can be hierarchical or network-based. Therefore, the main goal of this study was to select the most suitable business strategy and to prioritize marketing resources for one of the major agro-food firms in Iran. To ensure the robustness of the results, both fuzzy analytic hierarchy process (AHP) and fuzzy analytic network process (ANP) were applied to prioritize business strategies and marketing resources. The results of both methods revealed that the differentiation strategy had the highest priority in terms of the experts' viewpoints. The results also showed that managerial and customer relationship capabilities were the most important criteria in selecting the differentiation strategy. According to the findings of the study, for the successful implementation of the differentiation strategy, company managers are recommended to take the following three main elements into huge consideration: financial conditions, paying attention to customer’s needs and requirements, and the introduction of new products and services.

Local Entrepreneurs’ Involvement in Strategy Building to Facilitate Agro-Food Waste Valorisation within an Agro-Food Technological District: A SWOT-SOR Approach

The paper focuses on Agro-food waste valorization conceived as a long-term, complex socio-technical process involving several different actors belonging to multiple levels. Although this process is typically affected by a series of uncertainties, the convergence of stakeholders’ expectations proves to be a means to overcoming barriers, as it acts as the foundation of a shared agenda setting which formalizes the coordination efforts among the actors involved in an innovation process. Applying the strategic niche management (SNM) framework to the case of the Apulia Agro-Food Technology District (DARe), whose mission is to promote a bio-based industry for food-waste valorization, the paper proposes an operational tool capable of designing the strategy based on the entrepreneurs’ knowledge. The DARe aims to promote the technological innovation of agro-food firms located in the South of Italy. The results of a SWOT-SOR analysis led to the establishment of a twofold strategy aimed at (a) promoting the innovation of more active and dynamic firms, and (b) reducing the gap between “pioneer” and “laggard” firms, with the result of promoting integrated innovation throughout the entire district.

Cocreating social innovations between an agro-food company and rice farmers in Taiwan: exploring the process mechanisms

PurposeWhile literature discussed value cocreation, most still has its focus from customer perspective, this study fills up this gap by focusing on supplier perspective. Second, prior works discussed the outcomes of cocreation; however, the process mechanisms are still under-explored, this study thus aims to explore these process mechanisms that drive value co-creation in the agro-food industry.Design/methodology/approachCase study is used as the method; specifically, six in-depth interviews on an agro-food company and its suppliers (i.e. farmers) are conducted, and data are analyzed using the grounded theory approach.Findings(1). Agro-food company and its rice suppliers invest different resource types and resource density, and the agro-food company is a main actor, i.e. resource investor and integrator; (2). While motivations of the agro-food company and farmers are different, they are mutually fit in the sustainability value; (3). Both parties share similar process mechanisms, i.e. co-production, senses of identification and trust, mutual interaction and information sharing and (4). Both parties thus have similar consequences, i.e. sustainability, codevelopment.Originality/valueThis study (1) proposes an innovative model of what and how values are cocreated, particularly in the agro-food industry; (2). uses three theories, i.e. input–process–output (I–P–O) model (McGrath and Kelly, 1986), service-dominant logic (SD-L) (Vargo and Lusch, 2004), cocreation design framework (Frow et al., 2015), to understand this phenomenon and thus demonstrates and enriches these three theories, particularly applied in the agro-food contexts; (3).offfers practical suggestions to agro-food firms and social enterprises, particularly those having food safety and environment issues.

Does investment in trade credit matter for profitability? Evidence from publicly listed agro-food firms

The paper examines the relationship between trade credit investment and firm profitability, employing a panel of publicly listed agro-food firms in the United States for the period 2001-2014. Whilst almost all firms in the sample invest in trade credit, there is statistically significant variation in the level of trade credit investment and credit period within the United States public agro-food industry. The pooled ordinary least squares, fixed effects and random effects estimations established a significant positive effect of trade credit investment on firm profitability. Due to endogeneity concerns, an instrumental variable fixed effects model is estimated and the results also confirm a statistically and economically significant positive effect of trade credit investment on firm profitability. The results are robust to different econometric estimation techniques and to the use of non-market based measure (return on assets) and market based measure (Tobin’s q) of firm performance. The paper concludes that investing in trade credit significantly increases profitability of agro-food firms as suggested by the financing, transaction/operation and commercial theories of trade credit. Notwithstanding, firms’ trade credit investment decisions should be guided by cost-benefit tradeoff.

Trade credit supply in African agro-food manufacturing industry: determinants and motives

PurposeThe purpose of this paper is to examine the determinants and motives for supply of trade credit among agro-food manufacturing firms in African countries.Design/methodology/approachThe paper uses a subsample of food manufacturing firms from World Bank Enterprise Survey in eight African countries in 2014. Two-limit Tobit models are specified for the determinants of trade credit supply (TCS) and the motives for TCS are inferred from the determinants. An instrumental variable two-limit Tobit model is estimated to check the endogeneity of trade credit received (TCR) in relation to trade credit supplied.FindingsThe level of TCS is significantly related with degree of product diversification, manager experience, level of TCR and overdraft availability. From the results, financing motives (particularly liquidity and redistribution) and commercial motives (particularly marketing and quality guarantee motives) for TCS are implied.Research limitations/implicationsThe parameter estimates may contain both demand and supply effects as the two effects cannot be separated due to absence of information on firms’ customers in the data set. The results should be interpreted in this context.Originality/valueThe motives for TCS by agro-food firms is less understood in the agricultural finance literature and this paper makes an important contribution in this regard. In particular, the paper shows the degree of product diversification is directly associated with TCS, a relationship which has not been explored in the trade credit literature.

Innovation in Agro-Foods: A Comparative Analysis of Value Chains

ABSTRACTThe innovative activity of firms has been linked to the introduction of a new product or process associated with the development or application of new technological knowledge. New products generally contain innovative techniques that increase the quality of goods. New processes are based on the use of new technologies to increase the efficiency of production. However, the exclusive link between technology and innovation has been criticized for various reasons. It provides a restrictive vision considering innovation as part of the manufacturing and services sectors. Innovation in firms affects not only the development and application of new technologies but also the adoption and the reorganization of business processes, internal organization, external relations, and marketing. The literature in the field of management emphasizes the importance of integrating product, process, and organization to translate new ideas into market success. Thus, to obtain a complete picture of the innovative efforts of firms in the agro-food industry, the concept of innovation has been extended to both technological and nontechnological innovations. This analysis provided evidence of innovations used by agro-food firms. It also identified latent demand for future innovation.

Cooperation in the food industry: contributions and limitations of the open innovation model

This article focuses on the multi-partner relationships between agrofood firms and external stakeholders to innovate, which some authors today call the Open Innovation model (Chesbrough, 2003). Based on various studies we have conducted on innovation and cooperation processes in agrofood companies, we show that innovation processes are not always “open”, as some companies prefer to develop their innovations internally. For various reasons (confidentiality, obstacles in protecting innovations, difficulties in establishing relationships in the absence of internal R&D, etc.) these firms can choose to innovate without recourse to external partners. Furthermore, we discuss the hypothesis that geographical proximity between companies and stakeholders would automatically result in a greater ability to absorb external knowledge and technologies. “Remote” cooperation is strong and organised proximity plays a key role in facilitating the cooperation.JEL Codes: D21, L20, L66, O32

Mental innovation space of Vietnamese agro-food firms

Purpose – Vietnamese agro-food firms are often small and have short value chains. They are facing increasing competition from multinationals to serve the consumers of the rising middle class. It is assumed that co-creation or open-innovation can be a competitive innovation strategy for the Vietnamese firms. Therefore, the purpose of this paper is to understand whether the agro-food firms have the “mental space” or an according mindset to innovate with their customers. Design/methodology/approach – A three dimensional model of “mental innovation space” (MIS) was developed, comprising of the: focus of innovation, level of innovation and degree of collaboration. A total of 14 Vietnamese agro-food companies agreed to embark on a process of problem definition for innovation according to these three dimensions. This process creates a deeper understanding of the firms’ fuzzy front end of innovation and results in less hypothetical findings, compared with traditional interviews. Findings – The results show that t...

Efficiency and its determinants in the agro-food industry of Samsun Province, Turkey

The aim of this study is to explore efficiency and its determinants in the agro-food industry in Samsun Province, Turkey. Using data collected from 49 firms, the data envelopment analysis method was used to estimate efficiency measures. The results of efficiency analysis reveal that the mean technical, allocative, and cost efficiencies are 0.90, 0.89, and 0.81, respectively. However, the results indicate that the inefficient firms would have had to lower costs by 19% to perform as well as other similar firms. Having a brand, applying marketing strategies, and establishing cooperation positively influence on the economic efficiency. However, there is a negative relationship between capacity use ratio and the efficiency. To enhance the efficiency in the agro-food industry, decision makers should focus on sound management, preventing unproductive investments and overcapacity, encouraging trademarking, market research, and ensuring cooperation among the agro-food firms.

Explaining innovation in mature industries: evidences from Italian SMEs

In recent years management scholars and practitioners have been interested in innovation in high-technology industries. However, little attempt has been undertaken to examine factors affecting innovation in mature industries, such as agro-food. In this paper we tried to fill this literature gap. We hypothesise that weak-collaborations have a positive effect on firms’ innovations. We test our hypotheses on a sample of Italian agro-food firms. We discuss our results and present some theoretical and practical implications.

Application of Data Envelopment Analysis and Key Characteristics of Greek Agro-Firms

The purpose of this study is to investigate key characteristics for the competitiveness in Greek agro-firms during the time period 2004 to 2011, based on firm level financial data. The study attempts to determine the firms' efficiency as well as the impact of exporting activity in agro-firms competitiveness, and more specifically in fisheries, farms with livestock and farms with fruits, vegetables and cereals. Although many empirical studies have been conducted relative to manufacturing firms' financial characteristics, limited research exists on agro-food firms. The use of DEA method seems to be a very useful tool for efficiency assessment and identification of best practices in firms' management for both managers and the Government as well in order to facilitate the growth of the agricultural sector.

The capital structure choices of agro-food firms: evidence from Italian SMEs

The theme of capital structure has always been of great interest in the debate between scholars in the business research field. The aim of this paper is to test the application of the different financing theories in explaining the capital structure choice of 82 Small and Medium Enterprises (SMEs) within the Italian agro-food industry. The results show that the financing decisions in these firms could be explained through the main capital structure theories: Pecking Order Theory (POT), Trade-off Theory and Fiscal Theory. In agreement with POT, our results confirm an approach comprising an initial check on availability of internal resources, followed by the use of external capital (particularly bank debt). The research questions of this paper are the following: How do companies finance themselves? What are the mains factors that influence a firm's financing decisions?

English

The aim of the research is to evaluate the differences between economic and financial results in a sample of micro enterprises (MEs) and small / medium sized enterprises (SMEs) in fruit and vegetables processing industry in Italy. The firms included in the sample operate in an industry characterized by high capital intensity; this character is caused by the length of working capital cycle and high level of fixed asset investment. These characteristics of the firms can amplify the differences in economic and financial management results. In order to offer a comparison in applying economic and financial approaches, especially useful for agro-food firms operating in a capital intensive sector, in the article are calculated 12 ratios, of which 7 are sustainability ratios (calculated 3 with economic approach and 4 with financial approach) and 5 are interest coverage ratios (calculated 2 with economic approach and 3 with financial approach). The article highlights that economic and financial approach has statistically different result in the firm’s sample. Considering the significant differences in economic approach and financial approach, the firms could incur in error, and it will be necessary to identify which of the 2 approaches provides the correct indication of sustainability. The way of analysis proposed in the article can then be used to analyze firms operating in other agro-food sectors, especially if characterized by high capital intensity, high capital investment in fixed assets, long production cycle and long time debt collection.   Key words: Firm cycle sustainability, economic and financial approach, interest coverage ratio, fruit and vegetables processing industry.

Agro business in a changing competitive environment - Campania firms' strategic, marketing and financial choices

Over the last few years, the agro food industry has been undergoing a process of accelerated change. This exploratory research analyses the strategic choices of Campania (Italy) agro food firms and focuses on competitive issues; issues that are largely affected by the mono-product nature of the SMEs, which characterise the economy of Campania. In this context, the paper investigates the critical factors of success and/or failure of the Campania agro food industry, the strategies adopted by firms, their resulting performance, their capital structure and the actions necessary to increase competitiveness. The methodology is based on secondary data research, literature review, and a survey of 97 firms and 12 experts’ interviews. The research demonstrates some strategic problems of Campania firms, relating to competition, decision making and financial performance. Some firms were found to implement winning strategies, with their most important characteristic being their marketing orientation.

Estrategias empresariales y propensión exportadora de la industria agroalimentaria catalana y española

In an increasing globalized environment, the agrofood firms’ competitiveness becomes a strategic need for future survival. Recent changes both in agrofood markets and consumers’ habits have encouraged firms to adopt adequate managerial strategies. The objective of this paper is to determine main factors affecting the exporting behavior of the agro-food firms. Data come from the Survey on Firms Strategies (ESEE). To achieve this objective, a model has been specified and estimated taking into account the characteristics of the database. The personnel qualification, the existence of foreign capital, the existence of potential benefits in foreign market and the firm’ age are the main factors explaining the agrofood firm decision to export. On the other hand, variables denoting firm size and domestic market concentration and saturation are more important to explain export intensity.