organizational relationships, focusing on their governance mechanisms and performance. He has published numerous papers and book chapters about procurement and subcontracting, particularly in transportation and construction industries. He has also extensively researched on franchising and other business networking. He also works as occasional consultant for companies and institutions on governance and organizational issues.Emmanuel Raynaud is a research fellow at INRA (department SAD) the leading French research institute dedicated to the agricultural sector. He is also the head of the pluridisciplinary research unit SADAPT. He has work extensively on various topics such as the governance of franchised chains, vertical coordination in agribusiness sectors and products' quality, the dynamics of institutions framing economic transactions. He is currently working on the procurement strategies and governance choice in institutional catering. CORRESPONDING AUTHORMarta Fernández-Barcala can be contacted at: mbarcala@uniovi.es ABSTRACT Purpose: The aim of this paper is to explain the organizational changes along supply chains when a geographical brand, i.e., a place name that has value for commercial purposes, becomes a Geographical Indication (GI).Design/methodology/approach: Employing a case study research design, this paper compares GI vs. non-GI supply chains in the EU and describes the organizational changes that occur in supply chains when a GI is adopted.Findings: When a GI is adopted, (1) an additional "public" level of governance is added along the supply chain that forces it to (2) reallocate and specialize quality controls between the public and private levels of governance to avoid redundancies and to (3) adopt more market-oriented mechanisms of governance in dyadic relationships. The paper argues that these changes occur because the private and public levels of governance complement one another.Research limitations/implications: More aspects of supply chain management (the power balance or relationship stability) and a more systematic longitudinal analysis using supply chains in various agrifood industries should be considered to generalize the conclusions. An econometric analysis formally testing the main conclusions (propositions) is also required. Practical implications:The needed changes to successfully adopt a GI are identified, and an explanatory map of these changes is offered.Originality/value: The structural governance tensions created by the use of commonpool resources within supply chains are explored. It is hypothesized, first, that when a "common-pool resource," namely a geographical name, is used in a supply chain, some type of public level of governance that promotes cooperation is required to preserve its value. Second, this public level of governance complements the dyadic mechanisms of governance, requiring the specialization and reallocation of quality controls, and the move toward more market-oriented transactions.Article Classification: Case study affecting the quality of the end produc...
This study examines whether geographical indications (GIs) truly enhance producer quality, which is a main regulatory justification for the GIs' existence. We compare the quality of wine producers with and without GIs and test for the effectiveness of GIs based on (a) the strictness of GIs' production standards and (b) GIs' organizational characteristics as a collective brand. We argue that GIs encourage producer quality because they attenuate free-riding problems, provide incentives to invest and facilitate knowledge sharing. Focusing on the Spanish wine industry, the results reveal that except for wineries with the lowest GI category (i.e., protected geographical indication), GI wineries show higher quality than non-GI wineries. We also observe that more stringent categories increase quality but at a decreasing rate. Regarding the influence of organizational features, we found that collective action problems seem to be relevant. First, above a certain threshold, the number of producers affiliated with a GI decreases the wine producer's average quality (i.e., it shows an inverted U-shaped relationship with quality). Second, GIs covering very large geographic areas are found to be less effective. [EconLit Citations: L15, Q12, Q18]. 1 | INTRODUCTION Geographical indications (GIs) constitute a central tool of European Union (EU) quality policies for the agri-food sector (Agostino & Trivieri, 2014; Josling, 2006). This aim is clearly and explicitly referred to by Article 1 of the European regulation on GIs: "The measures set out in this Regulation are intended to support agricultural and processing activities and the farming systems associated with high-quality products, thereby contributing to the achievement of rural development policy objectives" (Regulation UE1151/2012, emphasis added). Surprisingly, the economic and business literature has not studied whether GIs achieve their main objective, that is, to promote the production of high-quality products among firms. In other words, does belonging to a GI enhance the quality of the producers? This is not a trivial issue because guaranteeing the origin of a product does not necessarily guarantee the high quality (Josling, 2006). Nevertheless, this question has not often been the focus of research on GIs. Conversely, the economic debate about GIs has gone towards the appraisal of their collateral effects, focusing on their potential restrictive effects on international trade (e.g., Frantz, 2016; Meloni & Swinnen, 2018) as nontariff barriers that serve the protectionist interests of domestic agri-food industries (e.g., Landi &
Potential guests have difficulties in obtaining reliable ex ante assessments of hotels because of the adverse selection problem. Consumers now have a new source of information about hotel quality: information providers on the Internet. The key issue is the degree of reliability of this information. Two types of Internet information providers can be distinguished: those that also sell the assessed services (‘sale Websites’) and those that do not sell services (‘advice Websites’). The former obtain their income via fees, while the latter obtain theirs via advertising (number of hits). It is argued that the information on advice Websites is more reliable than that on sale Websites because the latter suffer from a misalignment of incentives arising from the inverse relationship between income/reward and the quality of the report. Our results show that sale Websites (fee financed) provide an assessment of the quality of their hotels which is on average 7% higher than the equivalent assessment of advice Websites (advertising financed). This difference increases significantly with the hotel category, with up to a 9% increase for five-star hotels. It is also shown that there are systematic differences in the quality appraisal between these two types of information providers. The main implications for tourists and hotel managers are outlined.
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