Alignment between Quality Enforcement Devices and Governance Structures in the Agro-food Vertical Chains

Using a Transaction Cost Economics framework, this paper studies how supply chain governance are aligned with the type of quality enforcement mechanisms used in transactions with consumers. Specifically we compare governance of supply chains when private brand assures quality to chains where official certification assures products’ quality for customers. To test our proposition, we conducted a set of 42 case studies in 3 agro-food sectors (processed meat, cheese, fruits and vegetable) from 7 European countries. We found that supply chain governance is closer to hierarchy-like modes of organization in cases where reputational capital is the main quality assurance device, whereas market-like governance is more prevalent in cases with public certification.