Exploring inter-firm knowledge through contractual governance: A case study of production contracts for faba-bean procurement in France

Overview & Synopsis

A major sustainability challenge in European agriculture is to develop legume production. But organizing new legume supply-chains is a knowledge-intensive process, due to low past investment. In particular, technical knowledge development on crop production requires strong coordination between stakeholders. Even if contractual coordination in the agro-industrial sector is increasing, its role in inter-firm knowledge exchange is poorly understood. Drawing on qualitative case study, we explore how production contracts strengthened knowledge exchange between a processor and its grain-legume supplier’s in France. Based on Transactioncost economics and the Relational-view of strategic management, this paper draws an original setting for practitioners and research to analyze contractualization from a learning perspective. The results show that collective contractual governance plays a major role for knowledge development through face-to-face interactions and specific intangible asset investments. This case study opens research agenda to analyze how contractualization brings the stakeholders into a collective progress curve.