Fair Trade Practices for Fighting in Emerging Countries: A Business-Centred Approach

Introduction

Fair trade (FT) is a social movement whose objective is to improve the conditions of workers in developing countries (Oosterveer et al., 2014, Hainmueller et al., 2015; Naylor, 2018). Its strategy is to ensure that producers receive a fair price for their certified-origin products and to apply the “Fairtrade” mark to these products. In less than 25 years, this type of trade has reached significant market shares in European countries (Oosterveer et al., 2014, Raynolds & Greenfield, 2015; David, 2016; Geysmans et al., 2017). However, the market shares of these products are still generally low (Brunner, 2014, Argade & Singh, 2016; Möckel, 2019; Ciambotti et al., 2019).

FT represents one of the possible ways to alleviate poverty in developing countries (Tovernić, 2017; Klammer & van den Anker, 2018; Overbeek, 2019). The funds received go directly to the producers, who receive an adequate amount for their work, which contributes to improve their situations (Navrátilová et al., 2019). This trading system implies that the individual purchase choice of final consumers influences the power and wealth distribution in world trade (Anderson, 2018; Sama et al., 2018; Gillani et al., 2019).

On the other hand, in an increasingly global context in which consumers are interconnected, both the literature and business practice highlight the importance of developing management systems based on corporate social responsibility (CSR) (e. g., Hickle, 2017; Brunton et al., 2017), as a sign of the organization commitment towards economic, social and environmental sustainability (Porter and Kramer, 2011). In addition, many works have shown a direct relation between CSR and company results (performance) (Lai et al., 2010; Kumar et al., 2016; López-Pérez et al., 2017).

The literature reveals previous studies related to the FT background and prior knowledge for consumers (Pérez and De los Salmones, 2018). Another group of studies have examined the determinant elements of this type of consumption (Ríos et al., 2015). Some authors such as Lin et al. (2011) took as a reference the justice framework to structure their study. From the marketing point of view in the FT, the trust value that FT generates among consumers has been demonstrated (Andorfer and Liebe, 2015).

However, despite the relevance of this phenomenon, the literature review brought us to determine that there is still scarce research that has addressed the real impact of FT on business results. The vast majority of these works consider the customer perception in developed economies where a large percentage of the population has their basic needs covered. However, studies that have addressed the phenomenon in the emerging country context have not been found. Therefore, we can affirm that, until now, there is no clear evidence of empirical research on a possible mediating effect of FT between CSR and business performance variables in emerging economies, becoming this research pioneering in this regard.

Once this gap in the literature has been identified, this research aims to find out whether there is a mediating effect of the FT between CSR and enterprise performance. The relevance of the study lies in the fact of analyzing the context of an emerging economy from the perspective of managers of retailing companies, in such a way that, indirectly, we are capturing consumers’ attitude and predisposition to consume fair trade products. We understand that the result obtained could immensely contribute not only to retailing companies, but also to producers, local communities, environment and society in general.