Adopting environmentally-friendly certifications : Transaction cost and capabilities perspectives within the Italian wine supply chain

Purpose–Environmentally-friendly certifications have increased over the past decade within food supply chains. Although a large body of literaturehas explored the drivers leadingfirms to adopt such certifications, it has not closely examined the strategic motivations associated with theiradoption. This paper aims to investigate an environmentally-friendly certification, VIVA, examining its role as an alternative form of supply chaingovernance. The aim is to investigate the drivers affecting the adoption of VIVA and to assess managerial perceptions related to transaction-relatedcharacteristics and thefirm’s internal resources and capabilities. Design/methodology/approach–This study draws upon both an extended transaction cost economics perspective, which is based on transactionrisks and the resource-based view, which examines afirm’s internal resources. A survey was conducted via a structured questionnaire sent to all ofthe wine producers in charge of the decision regarding whether to adopt VIVA certification. A Hierarchal Bayesian Model was applied to analysequestionnaire responses. Such a model allows us to specify the probabilistic relationship between questions and latent constructs and to carry overuncertainty across modelling levels. Findings–The adoption of this environmentally-friendly certification is envisioned as a tool to curb internal risks, and thus to manage behaviouraluncertainty within the supply chain. A high level of exposure to exogenous transaction risks discouragesfirms from adopting VIVA certification. Thecertification system is not perceived as a promoter of operational capabilities. Managers are more likely to implement the certification when theyexpect that its adoption will leverage their potential knowledge of the supply chain or prompt new and better collaborations with the suppliers.Therefore, the certification can become a resource that interacts with the capabilities of thefirm, expressing complementarities that stimulate theformation of dynamic capabilities.Research limitations/implications–The identification of drivers from the two theoretical perspectives offers insights into the attributes that areperceived as important by managers and which, therefore, could be leveraged to foster the adoption of the environmental certification. The externalvalidity of the study could be improved by extending the sample to other certifications and supply chains. Originality/value–The study offers a different perspective on environmental certification. It demonstrates that considering the certification as analternative form of supply chain governance opens up a set of efficiency and strategic considerations that could be addressed to promote theeffectiveness of an environmental strategy within a supply chai