Governance structure choice in the supply chain of broiler chickens: an empirical study in Central Java, Indonesia

Abstract

This study aims to clarify the dominant factors (which can be defined as antecedent factors) influencing the structure choice in the supply chain governance of traders and middlemen of broiler chickens. This study has utilised closed-ended questionnaires with a five-point Likert scale distributed to several traders and middlemen of broiler chickens in the traditional town market in Semarang City of Central Java Province. One hundred and twenty-five copies of the questionnaire were administered to the traders of broiler chickens in these marketplaces: North Johar, Central Johar, South Johar, Bulu, Karangayu, Peterongan, and Jatingaleh. Additional information was collected through follow-up telephone interviews and archive records. Data acquired from the questionnaire were processed using structural equation modelling (SEM). The findings indicate that the transaction cost economy and the collaborative advantage have a significant positive effect on the level of integration; in this case, the effect of the transaction cost economics is stronger than that of collaboration advantages. The findings also suggest that the transaction cost economics significantly depends on uncertain conditions between traders and the middlemen; whereas, the collaborative advantage significantly depends on uncertain conditions and collaboration capability.