The determinants of retailers' margin related bargaining power: evidence from the Irish food manufacturing industry
This paper investigates the determinants of retailers' margin related bargaining power in the context of food retailer–manufacturer relationships. The study is based on an empirical analysis of 97 trading relationships between Irish food manufacturers and their Irish and British retail customers. It complements earlier research, focused mainly on structural characteristics of the industries, by integrating product and relationship characteristics into the analysis. Using measures based on manufacturers' perceptions, the study finds that retailers' margin related power over food manufacturers is positively related to the importance of economies of scale in manufacturing, retail concentration and own brand penetration of the market. The results also show that retailers' margin related power increases as product shelf-life increases and as manufacturers' specific investments increase.
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