Embeddedness and sustainability effects of Chiquita’s banana operations in Costa Rica

Johannes Hunkeler

Abstract

Multinational enterprises (MNEs) and especially Chiquita have been under pressure to manage and report their commitments towards sustainability. The public discourse is usually limited to negative externalities and does not address the positive sustainability effects that can result from the local embeddedness of the MNE. It is important to understand this perception gap and to rebalance the sustainability discourse.

This study investigates the local embeddedness of Chiquita in Costa Rica and whether this is generating positive sustainability effects for the local communities, the local economy and the local environment as Chiquita is committed to sustainable banana production.

The study analyses whether the company is living up to international standards such as the Rainforest Alliance (RFA) standard that it supports and whether or not it is contributing to local entrepreneurship and sustainable practices outside the company. The data collected and indicators used in the study examine the extent and quality of Chiquita’s embeddedness. Further, information on how Chiquita is perceived by experts and the local population is important to for the socio-economic development of the region.

The study reveals the embedded ties that create value through mechanisms such as trust, knowledge transfer, and jointly seeking solutions to solve pertinent problems; bringing international standards to local businesses and integrating them into (global) markets. By assessing the quality and extent of «local embeddedness» the study contributes to the designing of a tool-kit that should measure the degree of embeddedness and the positive sustainability effects of locally embedded Swiss-based multinational companies in developing countries.

Keywords: Costa Rica, Chiquita, standards, security, perception gap, legacy problem

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