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Home arrow Marketing arrow Food Security and Sustainability: Investment and Financing along Agro-Food Chains

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Conclusion

The empirical evidence on the subsidiary impact is not reflected in the most recent models of agro-food GVCs. In contrast, these models continue to adopt a more neoclassical and hierarchical view and thus do not assess the potential of the host country environment particularly for developing economies and consequently miss to acknowledge the existence of creative subsidiaries who play a key role in the governance of value chains and compromise the adoption of responsible business models. MNC-led GVCs have been analysed theoretically by both the GVC and IB theories. However, looking closely at most existing models, the MNC is perceived as a homogeneous entity of a hierarchical structure. This is clearly showcased though the agro-food value chain and its impact on food security. As value chains are firm and industry specific, we must depart from such tempting simplicities and make sure that all important actors and stakeholders are included in the value chains. Subsidiaries are one of the important actors that are missing in almost every relevant analysis. Unless we include subsidiaries explicitly in the analysis we will continue to deliver incomplete and probably inefficient GVC models. The issue of data type then becomes central to this problem. More specifically, the OECD (2012) correctly acknowledges that we need to depart from macroeconomic data that hide information and address issues at the micro-firm level. We need to collect firm-level data, both quantitative data which can be found in company reports and qualitative data which can be derived from surveys and interviews in order to address the real- life aspects of GVCs. As the IATF (2016, p. 71) states, data collection of global benchmarking initiatives is organized around five dimensions: “(i) competitiveness and the investment climate; (ii) perceived constraints by businesses; (iii) business and investment barriers; (iv) risk and policy uncertainty; and (v) cost of operations”. In concluding, we should further improve the way we integrate theory with model methodology and data collection in order to be in a position to explore the potential for win- win-win situations across the agro-food GVCs.

The top 100 food and beverage (F&B) MNCs account for one third of the production and more than one half of the technological activities of the world’s F&B industry. Active in all aspects of GVCs they internationalize their R&D activities in pursuit of competitiveness and in response to the high cultural impact of local tastes (despite the strong global trends) and to diverse climatic conditions; they have extensive production networks, operating through approximately 8000 diversified subsidiaries; and they collaborate closely with their suppliers by providing, developing and exchanging information, products and services (Filippaios et al. 2009; Ernst and Kim 2002).

Consequently, investigating responsible investment and the impact of MNCs on food security requires an in-depth understanding of how contemporary MNC GVCs operate and how the impact of the role of subsidiaries in the GVC governance is addressed.

 
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