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Participation of SME distributors in the gray market: An empirical analysis of Spanish firms

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Abstract

Within the distribution channels of fast-moving consumer goods (FMCG), the negotiating of agreements with official suppliers is critical for the performance of small and medium-sized (SME) distributors. These distributors are limited by their size and negotiating power, which is significantly lower than that of their suppliers, leading them to seek alternative supply sources, such as that provided by the gray market. The participation of SME distributors in the gray market is not only conditioned by the negotiations with their official suppliers, but also by the role played by the size of the gray market and by the relationship with their suppliers. The literature shows very few studies into SMEs within this area of the distribution channel, so this article contributes an explanatory model of this phenomenon. Based on a sample of 181 Spanish distribution companies, our results confirm that negotiation is a favorable element, while granting limited importance to the role of the relationship. In addition, we find evidence of the key role of commitment between parties in a situation as peculiar as that of parallel marketing channels.

Suggested Citation

  • Gimeno-Arias, Fernando, 2021. "Participation of SME distributors in the gray market: An empirical analysis of Spanish firms," Small Business International Review, Asociación Española de Contabilidad y Administración de Empresas - AECA, vol. 5(2), pages 372-372, September.
    • Handle: RePEc:aaz:sbir01:v:5:y:2021:i:2:p:e372
    DOI: 10.26784/sbir.v5i2.372
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    References listed on IDEAS

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    2. Zhongju Zhang & Juan Feng, 2017. "Price of Identical Product with Gray Market Sales: An Analytical Model and Empirical Analysis," Information Systems Research, INFORMS, vol. 28(2), pages 397-412, June.
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    More about this item

    Keywords

    gray market; SME; fast-moving consumer goods; negotiation; commitment;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General
    • M30 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - General
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • M39 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Other

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