Cultivating the Niche: A Study of the Origins and Consequences of Standards-Based Certification Organizations in the U.S. Organic Food Industry - Executive Summary

Abstract

This three-paper dissertation examines the origins of standards-based certification organizations (SBCOs), their impact on regulatory structure, and their influence on market entry and exit rates in the U.S. organic food industry.

The first paper develops a typology of SBCOs and then quantitatively assesses what conditions led to the founding of distinctive SBCO forms in U.S. states. Findings from this paper suggest that standards initially served as a "fence" that established a boundary around the concept of organic but which subsequently served as a "gate" by which industry outsiders entered the organic industry, significantly altering the trajectory of the market.

The second paper examines how different SBCO forms influence variation and evolution in the content of industry law. The results of this paper provide answers to questions of when and under what conditions private governance organizations influence variation and evolution of industry regulation.

The third paper examines how SBCOs influence patterns of market entry and exit of organic producers. Findings from this paper show that SBCOs stimulate entry into the market and that the certification they provide to individual firms inhibits market exit and moderates the competitive effects of increasing form density.

Keywords: organic food, firms, sbco, standards-based certification organization, regulatory, market entry