Vendor Certification Program and Performance: Mediating Role of Absorptive Capability in Agricultural Food Processing Firms

Many food processing organizations increasingly apply numerous vendor certification programs (VCP) to ensure quality and sustainable competitive advantage in the sector. However, the impact of such VCP on the performance of the agricultural food supply chain (AFSC) remains debatable among both professional and academic arenas due to numerous factors. This study identified absorptive capability (ABS) as complementary asset which can be used to leverage VCP and AFSC performance. Statistical analysis was carried out using the data collected from 85 organizations involved in the agricultural industry in Vietnam. This research shows that there is a strong relationship between a firm’s VCP and its ABS. Food processing firms first see unfavourable benefits from direct implementation of VCP, however, accumulative efforts with manufacturer’s ABS could be paid off. ABS plays a mediating role in realizing VCP in improving innovation, and operational and financial performance. These results play a significant role in the agricultural sector to improve their performance and to implement sustainable agricultural practices. This paper significantly adds value in expanding the literature in AFSC, especially using VCP and ABS on increasing performance in AFSC. It also recommends new avenues to explore research in areas such as identifying the conditions appropriate to use VCP in agricultural sector to improve the performance.