Effects of the transaction characteristics on the side of dependence in a context of vertical coordination: The case of fresh produce exports from Chile to Europe

Abstract

While organization theories acknowledge the influence of specific assets on dependence and increasingly represent the latter as a structure of mutual dependence (dependence of A on B and dependence of B on A), there is, to the best of our knowledge, no empirical test concerning the impact of specific assets on a structure of dependence. Our chapter aims to fill this gap. It is all the more original in that it considers a case study where dependence changes sides according to the characteristics of the transaction. We examine the dependence between Chilean exporters and European importers when trading fresh produce. Such dependence originates with the need for just-in-time coordination and compliance with a compelling demand in a context of high price uncertainty.

Using a unique dataset from international trade in fresh produce between Chile and the rest of the world, we justify the use of a concentration sales ratio as a proxy for dependence and test the influence of a variety of specific assets on the side of dependence by using both categorical and dimensional approaches. Original findings show that certain transaction attributes have a strong influence on the side of dependence. In particular, the higher the frequency and the level of specific assets such as volume, niche varieties, and joint sales with other products, in the transaction, the greater the likelihood of a higher ratio of dependence for the importer rather than the exporter. Conversely, in the event of low levels of specific assets and less frequent operations, dependence tends to be greater on the side of the exporter.

Citation

Codron, J.-M., Aubert, M., Bouhsina, Z., Engler, A., Pavez, I. and Villalobos, P. (2014), "Effects of the transaction characteristics on the side of dependence in a context of vertical coordination: The case of fresh produce exports from Chile to Europe", International Marketing in Rapidly Changing Environments (Advances in International Marketing, Vol. 24), Emerald Group Publishing Limited, Leeds, pp. 161-190. https://doi.org/10.1108/S1474-7979(2013)0000024011