Collaborative market formation in transition economies

Collaborative market formation in transition economies
Endrit Kromidha, Giana M. Eckhardt, Fleura Bardhi, Drini Imami
European Journal of Marketing, Vol. ahead-of-print, No. ahead-of-print, pp.-

When markets and institutions fail, collaborative markets emerge where actors rely on each other to produce and consume goods and services they need. The purpose of this study is to explore the institutional work and conditions under which collaborative markets form, the role of market actors in them and their governance.

Drawing on the market formation literature and institutional theory, this paper ethnographically explores the creation and development of a collaborative market for bread in the rural context of post-communist Albania. It qualitatively examines the socio-historic institutional context in which new collaborative markets are born, the market formation work and how they are governed.

This paper finds that collaborative market systems are born and continue to operate because of an institutional vacuum, the symbolic salience of their materiality (e.g. bread) and structural changes. Collaborative market work constitutes reviving, calibrating and preserving old, relational practices, institutions and governance structures from social exchange to the market. What governs such markets is a combination of personal interests with informal and relational accountability where trust and reputational norms are constantly evaluated, allowing the collaborative market to evolve.

Theoretically, the study expands the notion of collaborative markets by examining how nonfirms/organizations work together to pool resources, renegotiate institutions and establish governance mechanisms.

In practice, this study can help market actors and regulators to understand how collaborative markets can offer more resilient solutions to macro institutional failures than a formal market.

This paper highlights the role of institutional context in fostering the need for a collaborative market formation. Distinct from other studies of market development in developed economies, it shows that market formation constitutes the revival of old, relational institutions that guide social exchange and its calibration for the new market context.

​When markets and institutions fail, collaborative markets emerge where actors rely on each other to produce and consume goods and services they need. The purpose of this study is to explore the institutional work and conditions under which collaborative markets form, the role of market actors in them and their governance. Drawing on the market formation literature and institutional theory, this paper ethnographically explores the creation and development of a collaborative market for bread in the rural context of post-communist Albania. It qualitatively examines the socio-historic institutional context in which new collaborative markets are born, the market formation work and how they are governed. This paper finds that collaborative market systems are born and continue to operate because of an institutional vacuum, the symbolic salience of their materiality (e.g. bread) and structural changes. Collaborative market work constitutes reviving, calibrating and preserving old, relational practices, institutions and governance structures from social exchange to the market. What governs such markets is a combination of personal interests with informal and relational accountability where trust and reputational norms are constantly evaluated, allowing the collaborative market to evolve. Theoretically, the study expands the notion of collaborative markets by examining how nonfirms/organizations work together to pool resources, renegotiate institutions and establish governance mechanisms. In practice, this study can help market actors and regulators to understand how collaborative markets can offer more resilient solutions to macro institutional failures than a formal market. This paper highlights the role of institutional context in fostering the need for a collaborative market formation. Distinct from other studies of market development in developed economies, it shows that market formation constitutes the revival of old, relational institutions that guide social exchange and its calibration for the new market context. Read More