Bridging the sustainability gap: How supply chain architecture dictates governance effectiveness in the Ecuadorian strawberry sector

Abstract

This research investigates the governance mechanisms driving sustainability in high-value, perishable agri-food systems, specifically focusing on governance path heterogeneity within the Ecuadorian strawberry sector. Moving beyond monolithic supply chain analysis, we examine how the configuration of the chain—distinguishing between two-stage (direct-to-retailer) and three-stage (intermediated) systems—dictates the effectiveness of coordination and environmental outcomes. Drawing on New Institutional Economics (NIE), we employ an empirical framework to disentangle the direct and mediated effects of formal and relational governance using data from a multi-stakeholder survey of producers and downstream agents analyzed via structural equation modeling (SEM). The findings reveal a significant "mediation shift" contingent on chain complexity: in two-stage chains, formal contracts provide the structural scaffolding that fosters relational trust; conversely, in three-stage chains, relational assets are the prerequisite for formalization. Crucially, we identify a "sustainability gap" where high transaction costs directly erode environmental performance, hindering the transition to a resilient bio-economy. These results suggest that policy interventions must be tailored to the specific organizational architecture of the supply chain to foster sustainable and resilient agri-food systems in the Andean region.