4689 - Environmentally friendly strategic behaviour in global agri-food chains

Strategic coordination is presented as a way to improve environmental quality in the cultivation and first-processing stages of global agri-food chains. The strategic variable is environmental quality and the goal is improvement of local firms’ incomes in the chain, in a world of market imperfections and unequal distribution of power in the global chain structure. The Global Commodity Chains approach (GCC) is combined with theories of industrial organization, especially for the consideration of market imperfections and strategic behaviour, which we analyse using game theory. Theories of environmental management and innovation are also considered.  

We commence with a discussion of market imperfections in global agri-food chains and a characterization of chain governance, where non-price coordination mechanisms serve as the principal means of interaction among agents. We then present the advantages of analysing strategic coordination among firms using key concepts of game theory, and discuss the concept of environmental quality, an integral part of product quality, and the advantages of coordination among firms in order to improve this element.  

We also offer a broad discussion of the concept of technology; environmental quality is considered part of the concept, as are potential markets for the product in question. Here, we differentiate between discrete and continuous technologies. If prices increase steadily as a result of improvements in environmental quality, we consider that technology is continuous, while if prices increase in a non-continuous manner, then the technology is considered to be discrete. We study the importance of horizontal and vertical coordination mechanisms to improve environmental quality in global agri-food chains, and conclude the analysis with general applications to chains of differing complexities in Central America.

Keywords: Global Agri-food chains, environmental technologies, environmental quality, strategic behaviour, games theory.

Author: Jimenez, Gerardo (Universidad Nacional Costa Rica, Costa Rica / Costa Rica)
Co-Author: Pelupessy, Wim (IVO-Universidad de Tilburg, Tilburg, Netherlands / Niederlande)


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