Country-of-Origin and Cross-border Firm Ownership in the Food Industry : A Study on Consumer Valuation in China and New Zealand

The food industry in China has provided one of the most interesting case of demand-pushed evolutions. Given the strings of food scandals that broke out in the 1990s-2000s, trust in local food producers has been severely damaged. The recourse to imported food products became the norm in Chinese households, whenever income allowed. This phenomenon on the Chinese market then contributed a wealth of data and case studies on the question of ‘country-of-origin’ (CoO) in the marketing/economics literature (Samiee, 2011). The importance of CoO in Chinese consumers’ preferences is by now an established fact, well-known among both academics and business managers in the field (Eng et al., 2016). In an effort to answer to consumer preferences, the domestic food industry recently started to explore alternative ways to build trust by associating with foreign firms through joint ventures, mergers, and acquisitions.

The present project focuses on this new and unexplored aspect of the CoO question. Indeed, the last decade has seen an increased internationalization of firms in the food industry, with foreign brands entering the Chinese market, bringing know-how and quality reputation, while Chinese capital was also heavily invested in enterprises and farm lands all around the world (Naidu, 2015). This ‘hybridization’ of ownership of food suppliers therefore forces a re-assessment of the concept of CoO. Given that the initial rationale for imported products resided in the higher trust conferred upon foreign producers and quality assurance systems, it stands to reason that the most restrictive understanding of an ‘imported product’ – i.e. produced in a foreign country by a foreign firm, using foreign personnel under foreign institutional supervision – is not applicable anymore.

This project first identifies a growing mismatch between theory and current business practices, and contributes to the literature by updating our understanding of the concept of CoO.

Objectives:

1) Study whether differences in owernship structure matters for consumers to determine their willingness to pay for food products. Preliminary evidence seem to point towards the strong reluctance of Chinese consumers to dissociate ownership from CoO. This observation is supported by the case of the X ‘scandal’ in China (2015) which saw the fully Chinese-owned Germany-produced dairy brand come under heavy public criticism for misleading consumers once its ownership structure was made public (with a sharp drop in sales volume). A pilot study completed in July 2018 in XJTLU has also highlighted the significant mitigating influence of firm ownership on consumers’ willingness-to-pay for dairy products from various CoOs.

2) Establish how consumers preferences in terms of cross-border ownership in the food industry articulates in firms' business strategies. Given the exploratory character of the present research project, the findings of this research will need to be wedged into existing theories and models. For instance, traditional models of firm internationalization such as the OLI-Model and its derivatives (Dunning, 1979; Gray, 2003), should be discussed in the context of this project, and so should the existing principles of marketing ethics (McCreary, 2005).

Research Questions:

1) Does firm ownership composition mitigate consumers’ willingness to pay for products with different CoO?
2) Given the history of food scandals in China, is the effect identified in (1) specific to China or also applies to other markets?
2) What (perceived) ethical considerations underpin cross-border ventures in the food industry from a consumer perspective?
3) How do (1) and (2) alter the rationale for the internationalization of firms in the food industry?

For more information about doctoral scholarships and PhD programmes at Xi’an Jiaotong-Liverpool University (XJTLU), please go to https://www.xjtlu.edu.cn/en/ and Click Study with Us.

How to Apply
Interested applicants are advised to email [Email Address Removed] (XJTLU principal supervisor’s email address) the following documents for initial review and assessment (please put the project title in the subject line).
• CV
• Two reference letters with company/university letterhead
• Personal statement outlining your interest in the position
• Proof of English language proficiency (an IELTS score of 6.5 or above)
• Verified school transcripts in both Chinese and English (for international students, only the English version is required)
• Verified certificates of education qualifications in both Chinese and English (for international students, only the English version is required)

Informal enquiries may be addressed to Dr Eddy S. Fang ([Email Address Removed]), whose personal profile is linked below,
https://www.xjtlu.edu.cn/en/departments/academic-departments/international-business-school-suzhou/staff/eddy-s-fang

Requirements
Academic qualification: The candidate should have a first class or upper second class honours degree, or a master’s degree (or equivalent qualification), in fields related to business, management or economics. Alternatively, backgrounds in psychology or sociology will also be considered. The candidate will have a practical understanding of both qualitative and quantitative research methods.

Language qualification: Evidence of good spoken and written English is essential. The candidate should have an IELTS score of 6.5 or above, if the first language is not English. The candidate also should have a good command of the Chinese language as most of the data collection will be in China.

This position is open to all qualified candidates irrespective of nationality.

Degree
The student will be awarded a PhD degree from the University of Liverpool (UK) upon successful completion of the programme.