Cite as: Shukla, S.; Kapoor, R.; Gupta, N.; Garza-Reyes, J.A.; Kumar, V.

, (2022), Role of
Information and Communication Technology in Mitigating Risks in Indian Agricultural Supply
Chains, Supply Chain Management: an International Journal (In Print)

Role of Information and Communication Technology in

Mitigating Risks in Indian Agricultural Supply Chains

Abstract

Purpose – Theorising from a resource-based view perspective, the intersection of supply chain

management and the use of IT has been investigated in this study. This work aims to investigate

supply chain performance as an essential outcome of the use of IT and explores the effect of

supply chain collaboration on supply chain performance. In addition, volume uncertainty has

been explored and tested to establish whether various associated uncertainties can be mitigated

when the use of IT is involved.

Design/methodology/approach –A sample of 121 senior executives from agri-tech firms was

collected by travelling and meeting the executives in person in various states of India.

Structural equation modelling (SEM) was used to test the hypothesized relationship of volume

uncertainty to supply chain performance via the use of IT and supply chain collaboration.

Findings – The results show that volume uncertainty significantly impacts supply chain

collaboration via the use of IT and supply chain performance via supply chain collaboration.

The use of IT positively and significantly impacts supply chain performance via supply chain

collaboration.

Practical implications – Witnessing the potential benefits of the emerging use of IT in the

uncertainty reduction as reported in this study, agri-tech firms operating in emerging rural and

agricultural economies can enhance supply chain collaboration to improve supply chain

performance.

Novelty/Social implications–The study unfolds how risks in agricultural supply chains

sourced due to the volume uncertainty can be mitigated through the use of IT and supply chain
collaboration to influence supply chain performance in rural agricultural and developing

economies. Volume uncertainty at agri-tech firms and farmers is a ground reality that has led

to an inability to plan and prepare, resulting in wastages and disruptions in agricultural supply

chains and farmers’ struggles.

Keywords- Information and communication technology, supply chain collaboration, use of IT,

supply chain performance, volume uncertainty

1 Introduction and motivation

Owning to the increased importance of supply chains, the research on the supply chain of

the food segment has gained momentum among experts (Mesic, Molnár and Cerjak, 2018). A

report from the Food and Agricultural Organisation (FAO) of the United Nations in 2016

reported that around 23% of the total damage caused due to medium and large-scale natural

disasters between 2006-2016 accounted for agriculture in developing countries. The report

highlighted that agriculture could be the victim of disasters and solve disaster risk by using

agricultural technologies. These agricultural technologies help reduce farm-level risks much

more effectively than the usual practices and have also been responsible for 2.5 times higher

net economic benefits (FAO Chile, 2017). Also, equal collaboration with the farmers is crucial

to having a sustainable supply chain to respond to various issues concerning the demand,

technological, and socio-economic factors (Yang et al., 2021).

The focus of this research is in the context of developing economies, especially India,

where agriculture is crucial for its economy due to it represents major employment generating

sector (70%). Despite its importance, the agricultural sector in India suffers from significant

problems and issues. Some reasons for such problems and issues are uncertainty and

information asymmetry in the entire supply chain due to middlemen and stakeholders. The

agricultural supply chain in India includes tier 1 suppliers such as marginalized farmers,
middlemen, agri-tech firms, distributors, retailers, and end-consumers. The use of IT reduces

uncertainty and information asymmetry by enhancing collaboration among stakeholders as it

keeps them aware of real-time information. This collaboration helps in the coordination of tasks

and events in the agricultural supply chain and eventually leads to improving supply chain

performance.

More specifically in this paper, we consider a scenario where the supply and demand risks

are mitigated through digitization, leading to better supply chain collaboration and improved

performance in the overall supply chain (Shukla et al., 2022). Agriculture as employment has

become a risky business these days. By agricultural risks, we mean that "everyday farming

decisions of farmers affecting the farming operations cannot be accurately predicted due to

several factors; this is the risk” (Kahan, 2008). In recent years, the risk has taken more

detrimental forms like destroying whole crops, hurricanes, pests, fire, diseases etc. (Hazell,

2010). New conceptual models are in the development process to expel extreme risks due to

the weather in developing countries (McMichael et al., 2003).

The focus on agricultural risk is motivated by the growing concerns of national

governments, international agencies, financial institutions and other stakeholders in the supply

chain (Jaffee, Siegel and Andrews, 2010). Given the complexities prevalent in the agricultural

sector, risk and uncertainty have been a long-standing issue for developed and developing

regions (Leat and Revoredo‐Giha, 2013). These include weather-related risks, risks due to

natural calamity, uncertainty in the availability of agricultural infrastructure, and demand and

supply-side risks (Jaffee, Siegel and Andrews, 2010).

This study concentrates on the demand and supply-side risks as it severely impacts the

agricultural supply chain (Tang, Sodhi and Formentini, 2016). The importance of risk selection

aggravates when any of the concerned stakeholders in the supply chain belongs to the

marginalized community (Valkila, Haaparanta and Niemi, 2010). Marginalized community

means, “an individual's or a group's inadvertent stance and the situation on the periphery of

social, political, economic, ecological, and biophysical systems that discourages them from

accessing resources, assets, and facilities, restricting freedom of choice, inhibiting the growth

of functionalities, and ultimately leading to severe poverty” (Von Braun & Gatzweiler, 2014).

In countries like India, most of the agricultural farmers belong to the BoP (Bottom of

Pyramid) and, as a result, do not enjoy financial comfort against risks and uncertainties. The

role of ICTs has been extensively used to increase traceability and automate the entire process

for better efficiency (Daneshvar Kakhki and Gargeya, 2019). However, very few studies in

developing nations have attempted to analyse whether ICT is an effective risk mitigation

measure in the agricultural sector (Khatri et al., 2017).

2 Literature review, theory and hypotheses development

The literature review is divided into two parts. The first subsection discusses the current

risk mitigation strategies adopted in the supply chain context. The second subsection explores

how ICT has minimized risks in a different context. Then, a triangulation of the literature is

done in two parts and coupled with the motivation of the agricultural sector from the literature

across and specifying developing countries; the research gap is stated in the last subsection.

2.1 Supply chain risk mitigation

Supply chain literature already has supply chain risk mitigation information in

abundance (R. Sreedevi and Saranga, 2017). Organizations need to bring in capabilities that

can mitigate supply chain risks. Three major risks are common in supply chains, namely:

supply risks, demand risks, and operations risks (Diabat, Govindan and Panicker, 2012).

Supply risks occur during the movement of materials from the supplier to the firm. Operational

risks, on the other hand, are associated with the firm’s capability of producing and processing

the goods. Finally, demand risks are associated with the movement of goods from firms to
consumers (Diabat, Govindan and Panicker, 2012). Chen, Preston and Xia (2013a) showed

how each type of risk could be reduced by internal and external collaboration.

The study by Aqlan and Lam, (2015) pointed out that lean proved to be an effective

risk mitigation tool as it increases the issue of over-dependency among the supply chain

partners leading to inefficiencies in the supply chain. The moderating effect of supply chain

flexibility in reducing the potential risks in uncertain environments was shown by (Sreedevi

and Saranga, 2017). Lack of coordination among the supply chain partners also leads to supply

chain risks (Sreedevi and Saranga, 2017).

To summarize, the risk mitigation literature highlighted the importance of integration

between stakeholders, improving flexibility, agility, and cultural context in reducing supply

chain risks in uncertain environments. However, very few studies (Kim, 2010), highlighted the

role of digitization as a risk-mitigating tool in the supply chain literature, especially in emerging

economies.

This study is undertaken within the context of India, which is a developing country where

deploying IT is a ‘big game-changer’ and where the majority of the farmers comprise a

marginalized community. In such a scenario, when there is a problem with the right information

in hand related to price, there is also a problem of information asymmetry, resulting in a high

level of uncertainty in demand and supply. Thus, our first intention was to investigate whether

the use of IT plays a significant role in bridging these gaps. Secondly, the focus of the study is

not on any specific product related to IT due to in countries like India, the expansion of IT will

take time in terms of the specifics of its usage. As of now, it is just at a stage where it helps in

connecting the marginalized farmers with the mainstream supply chain and agri-tech buyers.

These farmers are provided IT help as per their needs and problems like pest infestation or

flood or drought.
2.2 ICT, risk and supply chain

Vertical collaboration and technology adoption with suppliers helps in increasing

competitiveness (Benitez et al., 2021). There is a constant need to adopt new technologies to

improve the entire supply chain (Yadav et al., 2020). ICT had been studied in-depth for the

past few decades in information systems literature (Majchrzak, Markus and Wareham, 2016)

and operations management literature (Kumar, Singh, & Modgil, 2020) too.

Not only operational and financial risks but supply chains are burdened and susceptible

to strategic risks too. A study by Xue (2014) showed how digitization could mitigate strategic

risks in supply chains. One of the first few studies which discussed the role of IT in risk

management in the Indian agricultural sector was done by (Mittal 2012). The author

highlighted the critical situation of the sector, low productivity, shrinking agricultural land

base, poor market linkages, and the relevance of ICT in agricultural development. Also, in the

agri-food sector, information sharing is crucial among the various players to respond quickly

to new market possibilities (Anastasiadis and Poole, 2015).

To summarize, ICT had been an effective tool in mitigating risks in different contexts.

Although Mittal (2012) mentioned the problems of the Indian agricultural sector and

subsequently the role of IT in risk management, it did not specify whether or not IT can be

implemented in such contexts. On the one hand, we found that farmers belonged to the

marginalized community, and on the other hand, there were large numbers of fringe players

(agricultural buyers) who cannot afford such systems. We, therefore, argue that understanding

how IT can be implemented in the Indian agricultural sector and the real impact of IT in

mitigating risks in the agricultural supply chain and thus improving the overall performance

remains to be documented in the management literature (Dhaigude et al., 2021).

2.3 Research Gap

The risk mitigation literature in the supply chain suggested higher integration between

stakeholders to reduce risks from highly uncertain environments. Since the agricultural sector

is burdened with high supply uncertainty, we select volume uncertainty (VU) as one of the

constructs in addition to the use of information technology (UOI) as a tool. However, higher

integration could only happen when high supply chain collaboration (SCC) occurs in the

agricultural sector, especially in developing markets like India. This is because collaboration

can incentivize farmers to integrate the information with buyers. As a result, we argue that the

UOI should lead to SCC when there is uncertainty.

To conclude, we intend to observe whether the UOI leads to SCC during uncertainty.

Once SCC is achieved, we believe that risks arising due to uncertainties will decrease, and

hence overall supply chain performance (SCP) should increase. Therefore, we select SCP as

our main dependent variable for our model.

We present below the research questions in the context of agri-tech firms in the

agricultural sector in emerging economies:

Research Question 1: How does the volume uncertainty influence the use of IT, supply chain

collaboration, and supply chain performance?

Research Question 2: How does the use of IT influence supply chain collaboration and supply

chain performance?

Research Question 3: How does supply chain collaboration influences supply chain

performance?

3 Theoretical background

The natural–resource-based view (RBV) of the firm, as suggested by Hart (1995), to

explain the research framework was used. The RBV of the firm explains how the organization
exploits the competitive resources and converts them into organizational routines and activities

to gain a competitive advantage (Sardana, Terziovski, and Gupta, 2016). The RBV approach can

be effective in understanding, how firms can achieve competitive advantage at the BoP level

by utilizing a single resource and capability within the entire supply chain (Figure 1).

< Insert Figure 1 about here>

Following our research motivation that agricultural companies and farmers tend to

economically lose in the supply chain due to information asymmetry that flows bi-directional,

impacting and creating uncertainties in both demand and supply. We show the importance of

the RBV framework to our research hypothesis. The RBV framework suggests that the resource

needs to be valuable and non-substitutable. We consider that UOI for advisory services or

forecasting purposes is valuable while working at the BoP level for two reasons: first, value is

tacit as the advantage cannot be easily transferred to other players.

In other words, small players do not have complete information for operating at the

BoP. Second, the value is socially complex as operating in such environments requires local

knowledge and information to operate in such environments. Third, we also consider UOI to

be partially non-substitutable as challenges at the BoP are many, and companies may not find

it economically viable to implement the same.

The sole purpose of implementing digitization is to exchange information between

farmers and agricultural companies to estimate the supply disruptions, and farmers can estimate

the demand for the next season. Also, in the agri-food sector, information sharing is crucial

among the various players to respond quickly to new market possibilities (Anastasiadis and

Poole, 2015). Upon adopting the new technology, a farmer's decision is unbiasedly dependent

on its value for his profit (de Janvry and Sadoulet, 2020). Therefore, agricultural companies

can now offer better prices to the farmers as risks and uncertainties are minimized.
 This leads to improved SCC between farmers and agricultural companies, thus paving

the way for high SCP. Furthermore, when IT is facilitated to the farmers, they get a scope of

learning more benefits of new technology (de Janvry and Sadoulet, 2020). Talking about the

performance, we mainly concentrate on revenue and cost advantage due to the minimization of

risks. In addition, the agricultural companies can attain a superior position in positioning their

warehouses, optimizing the ordering quantities and estimating the market prices and hence

revenues in subsequent seasons.

3.1 Hypothesis development

Uncertainty means the status quo when the information cannot be accessed directly, and

the situation remains ascertained (Peng et al., 2020). Uncertainties in the various supply chain

stages add to the complexities and reduce efficiency (Peng et al., 2020). Not much work is

done concerning the in-depth discussion on uncertainty, as it cannot be forecasted (Wang,

2018). Supply chain flexibility has been discussed to solve uncertainty (R. Sreedevi and

Saranga, 2017). Demand uncertainty is the major source of uncertainty in supply chains (R.

Sreedevi and Saranga, 2017). However, there are numerous studies on demand uncertainty

(Ekinci, Serban, & Duman, 2019; Ouhimmou et al., 2019), but very few, where demand

uncertainty is used in the supply chain context are tested empirically (Huo, Zhang and Zhao,

2015). One of the interesting studies by (Hançerlioğulları, Şen and Aktunç, 2016) showed how

demand uncertainty could negatively impact inventory turnover in the supply chain. Further,

Ding, Lu and Fan (2017) find that the relationship between customer integration and

operational performance weakens in the presence of high demand uncertainty.

Frequent changes in the production process increase the supply chain's complexity and

uncertainty (Sreedevi and Saranga, 2017). The unforeseen changes in supply or orders lead to

variations in the production processes (Sreedevi and Saranga, 2017). The uncertainty in

demand, supply and manufacturing levels affects delivery quality and reliability (Sreedevi and
Saranga, 2017). VU is the inability to accurately foresee the volume requirements (Ford, 2017).

High VU leads to poor utilization of capacity, a rise in production costs, and inventory

variations (Ford, 2017). Firms with VU need to exchange a large amount of information with

their partners to fulfil the requirements or find new partners if existing ones cannot perform

(Mishra, Konana and Barua, 2007).

Thus we observe that uncertainty in demand can negatively impact the performance of

the firm consideration. Therefore, to foresee the uncertainty, there needs to be the UOI that can

help predict the VU with much closer accuracy. We also argue that in the presence of VU,

supply chain partners will tend to contribute to factors that can help promote SCC to mitigate

the negative effects of VU. Finally, we also discussed the effect of VU on SCP in the

agricultural context. We, therefore, state our hypotheses:

Hypothesis 1: Volume uncertainty positively leads to supply chain performance via IT in the

agricultural sector.

The literature on the relationship between IT and SCC is scant and diverse. Different

studies have defined; IT constructs differently, and their impact has been statistically tested in

different contexts. For instance, (Afshan, Chatterjee and Chhetri, 2018) defined segregated IT

in two dimensions: information quality and information sharing. The authors highlight that

some firms have failed to extract the full benefits of IT despite huge investments in IT.

Extending on similar lines, the paper also highlights that although information sharing is

critical to SCC, it becomes more important to guarantee that the quality of information shared

is accurate and reliable (Chen et al., 2011). Work done by Cai et al. (2016) discussed how IT

capability has positively strengthened the relationship between SCC and organizational

receptiveness.
 Panahifar et al. (2018) argued that if the channels of information sharing are trustworthy

and free of leakages, different stakeholders will be willing to collaborate for higher benefits.

One of the studies by Salam (2017) shows how technology leads to improved SCC. The

importance of technology turbulence as a moderator to the relationship between resource

complementarities and SCC was highlighted (Srivastava, Srinivasan and Iyer, 2016). The study

by Wu & Chiu (2018) showed that better information quality does not directly lead to SCC;

rather, the relationship is mediated through user satisfaction.

Summarizing the literature, we find that information sharing, information quality,

technology capability, and technology turbulence directly or indirectly affect SCC, especially

in uncertain situations. Taking a shift towards the Indian agricultural sector, where the

penetration of IT is very low and there is negligible evidence to prove collaboration between

marginalized farmers (as suppliers) and buyers, we argue that if buyers use IT as a tool, both

farmers and buyers will stand to gain both in the short and long run thereby improving SCC

among partners. We present our second hypothesis below:

Hypothesis 2: Volume uncertainty positively leads to supply chain collaboration via the Use

of IT in the agricultural sector.

As already discussed in their earlier hypothesis, the primary purpose of SCC in the agricultural

sector is to ensure that risks and uncertainties within the supply chain diminish. When it comes

to SCP, literature has extensively used SCC and SCP in different contexts. SCC comes with

many challenges when different entities are taken together (Solaimani and van der Veen, 2021).

However, we will only look into studies that directly involve SCC leading to SCP.

Adams et al. (2014) pointed out that relational technology intensity stands out as a mediator

between collaboration and performance. The study by Cao and Zhang (2011) shows how SCC
leads to collaborative advantage, leading to firm performance. Extending on similar lines,

Pradabwong et al. (2017) discussed that SCC strives to change its performance by looking

toward new opportunities. In addition, constructs such as collaborative advantage have been

used in different forms in different settings (Liao, Hu and Ding, 2017). For instance, Haque

and Islam (2018) use the term business competitiveness to test whether SCC has a positive

impact. Shifting our focus towards organizational learning, Cai et al. (2016) found that SCC

positively impacts organizational responsiveness.

There are studies directly linking SCC and different aspects of firm performance,

including performance towards sustainability (Seo, Dinwoodie and Roe, 2015; Pakdeechoho

and Sukhotu, 2018). However, it is interesting to note that none of the studies has linked SCC

explicitly with SCP when there is a trace of uncertain behaviour and risks. Therefore, we

hypothesize that SCC will directly lead to SCP in uncertain environments.

Hypothesis 3: Volume uncertainty positively influences the supply chain performance via

collaboration in the agricultural context.

Studies have discussed that the ICT in the supply chain is very effective in developing

supply chain capabilities (Nandi et al., 2020). However, different articles have used different

IT constructs to justify the claim (Vijayasarathy, 2010). Technology improves various

dimensions like collaboration, integration, transparency, efficiency and performance

(Frederico et al.,2019). The UOI will directly lead to logistics integration which will serve as

a mediator to SCP, which was discussed in work by Alam et al. (2014). This study encompasses

multiple emerging countries integrating different industries. Extending the logic on integration,

Chen, Preston, & Xia (2013b) stress the need for IT integration in improving the SCP of a firm.
 Further, Kumar et al. (2017) show how IT can directly lead to supply chain agility. The

importance of RFID technology to improve SCP was highlighted by Zelbst et al.(2012). Along

similar lines, Kim, Hwang, & Rho (2016) show how supply chain culture strengthens the

relationship between RFID utilization and SCP. Finally, the study by Chang, Tsai and Hsu

(2013) discussed that e-procurement has a positive impact on SCP. Synthesizing the above

discussion, we find that some studies have delved deeper into specific IT functionalities, while

others have tried to capture an overall perspective of the consequence of UOI. However, it was

difficult to see the studies showing that UOI has a direct impact on SCP.

Whereas the contextual motivation of UOI is immense, we argue that UOI will directly

impact SCP in the agricultural supply chain. Furthermore, understanding the information

provided in H3, we also find the importance of SCC towards SCP. We, therefore, present our

hypothesis below.

Hypothesis 4: The Use of information technology positively impacts supply chain performance

via supply chain collaboration as a mediator in the agricultural context.

Considering the knowledge collected from the above two hypotheses, H1, H2, H3, and

H4, we can also posit our fourth hypothesis, which is intended to understand UOI and SCC's

mediating role in the SCP. Hence we state our second last hypothesis as.

Hypothesis 5: The effect of volume uncertainty on supply chain performance is mediated via

the Use of IT and supply chain collaboration in the agricultural sector in emerging economies.
4 Methodology

To test our proposed hypotheses, data were collected from Indian agri-tech firms. The

scales used in the study were adapted from the published literature. We then used the partial

least square structural equation modelling (PLS-SEM) to test hypotheses (Chin, 1998). PLS-

SEM has certain advantages over the CB-SEM approach. First, this approach allows the

researcher to take fewer assumptions regarding the distribution of the sample data (Sarstedt et

al., 2014). Second, this method is robust to smaller sample size limitations (Hair et al., 2016)

for exploratory research.

4.1 Measures

We collected the data from the founders, managers and employees of the agricultural

firms, which facilitate the UOI to the farmers to improve SCC by mitigating uncertainties in

agriculture and leading to an improved SCP. The survey was distributed via online emails, in-

person discussions, and phone calls. All the items are measured on a 7-point Likert scale

ranging from "Strongly Disagree" to "Strongly Agree". We also introduced the reverse coded

questions in a few items to easily eliminate the casual respondents.

We contacted the various firms operating in the country's different states for our data

collection (Table 1).

< Insert Table 1 about here>

The survey instrument design comprised a total of 20 items. In order to adhere to the rigour of

the study, a pilot was conducted on 33 firms' employees, and the survey underwent many

revisions before finalizing the same.

4.2 Sampling and data collection procedures

The data collection was done in 2019-20. The data was comprised across the Indian

Subcontinent. In each state like Uttar Pradesh, Haryana, Gujarat, Karnataka, Rajasthan,

Maharashtra, etc., the buying firms were selected based on their association with the respective
farmers and were given the ICT services. The idea of choosing various places was multi-fold.

The simple reason was to keep the diversity in our portfolio simultaneously, and we wanted to

see if the idea of poor suppliers and buyback firms is really helpful in SPI improvement.

A total of 138 responses were collected, out of which 17 were discarded due to missing

values and ten were rejected due to multiple or repeated ticks for the same items. So overall we

had a total of 121 responses with approximately an effective 25% of response rate.

The emphasis on SCP was adapted from the study by Rodrigues, Stank and Lynch (2004)

as our overall intention was to understand the behaviour of the entire supply chain, including

stakeholders, when the use of IT is introduced. Similarly, UOI was adapted from the study of

Boynton, Zmud and Jacobs (1994) since the use of IT was the main construct to help us

establish our claim related to uncertainty reduction and improving the supply chain

performance. SCC was adapted from Corsten and Felde (2005), as we wanted to understand

whether the use of IT leads to supply chain collaboration because until then, obtaining an

improvement in supply chain performance might be a challenging task. Finally, VU was

adapted from Mishra, Konana and Barua (2007) because the supply chain in agriculture is

already filled with numerous challenges and information asymmetry due to a high level of

uncertainty, therefore this is one of the major constructs in our work.

The PLS-SEM model is properly examined and accordingly interpreted intelligently with

the sequence: first, the assessment related to reliability and validity were determined, and then

secondly, the structural model was assessed. Finally, the consistent PLS algorithm obtained the

path co-efficient, loadings, weights and quality criteria. A few dummy variables were also used

as control variables (Table 2).

< Insert Table 2 about here>

4.3 Statistical model

𝑆𝐶𝑃 = 𝛽0 + 𝛽1 ∗ 𝑆𝐶𝐶 + 𝛽2 ∗ 𝑈𝑂𝐼 + 𝛽3 ∗ 𝑉𝑈 + 𝜀

𝑆𝐶𝐶 = 𝛽4 + 𝛽5 ∗ 𝑈𝑂𝐼 + 𝛽6 ∗ 𝑉𝑈 + 𝛽7 ∗ 𝑈𝑂𝐼 ∗ 𝑉𝑈 + 𝜀1

𝑈𝑂𝐼 = 𝛽8 + 𝛽9 ∗ 𝑉𝑈 + 𝜀2

Where,

SCC - Supply chain collaboration

SCP - Supply chain performance

IT - Use of IT

VU - Volume Uncertainty

4.4 Measurement model

The model (Table 2) under the investigation comprised four multi-item constructs. With

exploratory factor analysis (EFA), we ensured that all the item loading for its underlying latent

variable is greater than 0.6 (Table 3), without cross-loadings taking place. We also did

confirmatory factor analysis (CFA) for testing the measurement scales of all the constructs. We

also checked the reliability and uni-dimensionality, i.e., the correlation of the item to the total.

Our model also stood by the discriminant and convergent validity requirements that are both

the Composite Reliability (CR) and Average Variance Extracted (AVE) were found above the

threshold value of 0.7 and 0.5 (Fornell and Larcker, 1981).

<Insert Table 3 about here>

4.5 Reliability and validity

After this, the discriminant validity is an important measure that reflects the extent to

which the measures of one variable do not reflect the other variable. This is an indication that

the variable of interest has a low correlation with the other variable. (Fornell and Larcker,

1981). The square root of the AVE, i.e., the diagonal values of every construct, is larger than

all other correlations with other constructs, pointing towards the required discriminant

validity, shown in Table 4 below.

 Since few schools of thought differ in the opinion that the discriminant validity is not

reliably detected by Fornell and Larcker (1981) in common research situations (Henseler,

Ringle and Sarstedt, 2015). Therefore, they suggested an alternative approach to assessing the

discriminant validity based on the multi-trait-multimethod matrix: the heterotrait-monotrait

(HTMT) ratio (Threshold > 0.85) of correlations (Henseler, Ringle and Sarstedt, 2015). Thus,

we tested discriminant validity through this method (Table 5).

< Insert Table 4 and 5 here>

4.6 Endogeneity and common method bias (CMB)

After the data collection was over, data was cleaned and managed to conduct the analysis.

Endogeneity is pervasive and sometimes inevitable in business research (Deng, 2016). The

issue has fetched attention only in the recent past (Sarstedt, et al., 2020). Hult et al., (2018)

argued that there is no comprehensive framework that combines the approaches to address

endogeneity in SEM research. They also described that Endegeinity may have roots in common

method variance, and simultaneous causality. In our research, we have addressed the issues of

CMB with appropriate rigour using standard methods.

Since our data collection was from a single respondent, we checked for CMB in multiple

ways, namely: (1) instrument design and administering stage; (2) design of the survey, by

incorporating the reverse coded items; and (3) through statistical control. We changed the order

of the constructs as designed in our framework to address the common method bias (CMB).

The face and content validity of the survey ensured that the survey items were compact and

easy to understand. Harman single factor test found a total variance explained as 38.94%

(Threshold < 50%). Furthermore, it has been argued that the studies involving mediation

analyses are generally free of CMB because it is not possible for the respondent to bias the

responses to influence the results (Chang, 2010).

 A straightforward way to reduce the endogeneity is to specify a set of control variables

(Reeb, 2012; Bernerth and Aguinis, 2016). We have used all relevant controls (Age of

respondent, Education, Income, Experience, employee strength, and annual turnover) from the

list of controls as suggested by Shu, Jin, and Zhou (2017).

To address the endogeneity concern, we conducted the tests of endogeneity by using

instrumental variables (Hult et al., 2018) in the model. We report the Durbin test, and Wu-

Hausman test statistics to confirm that the equations were free of endogeneity issues, and our

results were unbiased. If the p-value in both the tests is more than 0.05, the tests confirm the

absence of endogeneity. The Durbin and Wu-Hausman p values for SCP (0.8793, and 0.8905)

and SCC (0.7965, and 0.8054) were observed respectively in our endogeneity tests. This

confirmed the absence of endogeneity in our models.

Since we confirmed the absence of significant endogeneity in the research models, we

continued with PLS-SEM models to test our mediation hypotheses using non-corrected

estimates (Hult et al., 2018).

4.7 Structural model and empirical results

We assessed the structural model by considering the R2, beta, and the respective t-values

obtained by bootstrapping process using a resample of 5000, as suggested by Hair et al. (2016).

So, we check the relationships among the variables (Table 6). We find that, VU has

negative and significant effects on UOI and SCP, (β = -0.442; p =0.000) and (β = -0.185;

p=0.054). UOI positively and significantly affected SCC (β = 0.251; p=0.011). Similarly, SCC

also positively and significantly influences SCP (β = 0.591; p=0.000). We also found the

specific indirect effects from UOI to SCP to be significant (β = 0.149; p=0.027), which means

that SCC mediates the relationship between the two. VU negatively and significantly leads to

SCC via UOI (β = -0111; p =0.009) and negatively and significantly leads to SCP via UOI and
SCC both as mediators (β = -0.066; p =0.026). Therefore, we see that out of 5 hypotheses, H2,

H4, and H5 are supported.

< Insert Table 6 about here>

The obtained values for R2 for the phenomenon under investigation SCP is (0.457).

Next, an important aspect is to assess the f2 which is the effect size. The results discuss p-values

that give the significance level but do not indicate the effect size. Thus, to reduce readers'

confusion while interpreting the results and data, it is necessary to report both the parameters:

the p-value for significance and the F square for effect size. In order to measure the effect size,

we adhered to (Cohen, 1988) guidelines that follow 0.02 for small effects, 0.15 for those

considered to be medium and 0.35 for the large effect. We have shown the effect size in Table

4 above.

Next, the important parameter measured is the Q2 which is the predictive relevance. (Chin,

Peterson, & Brown, 2008), discussed it as a technique following the sample reuse. It is

measured by the blindfolding method in SmartPLS3, which shows the ability to reconstruct the

data empirically by model and the PLS parameters. If the value for Q2 is greater than 0, it is an

indication of the model possesses predictive relevance, and less than zero implies that the

model is devoid of predictive relevance.

5 Discussion, conclusion and limitations

This study has key results that contribute to the literature on the agricultural supply chain,

especially at the intersection of Industry 4.0 and emerging markets (Mitra, Kapoor, and Gupta,

2022). First, the UOI is a positive contributor to SCC and mediated VU and SCC's relationship.

Second, when VU was examined towards SCP via SCC in the first case and UOI in the second

case, the results were not supported in both cases, which means SCC and UOI both do not

mediate this relationship. Third, when the same relationship was double mediated with UOI

and SCC, the results were supported, indicating the mediating role of the UOI and SCC when
considered together. Fourth, the SCC was tested as a positive mediator between UOI and SCP,

which supported our hypothesis.

It is also indicative that during uncertain situations in agriculture if the UOI is adopted, it

enhances the buyer's (firm) and supplier (farmers). Fifth, the relationship was observed

between UOI and SCP with SCC as the mediation effect. As a result, we believe that UOI will

not directly lead to SCP in the agricultural sector unless there is adequate coordination between

two players coupled with the infrastructural capability of the buyer. Hence, the mediated result

is significant and positive, whereas the direct relationship is non-significant. Finally, SCC leads

to high SCP in the agricultural sector in emerging markets.

A vast digital divide exists between developed and developing nations due to the lack of

infrastructure, tools and relevant skills (Sharma et al., 2020). However, there are few studies

along similar lines concerning the detailing of developed and developing economies.

Firstly, the studies are mainly based on literature reviews on ASC, hence empirical works are

lacking. Moreover, the majority of the work has been done in the context of developed nations.

Thus, developing or underdeveloped nations have been devoid of much research (Routroy and

Behera, 2017).

Secondly, previous studies have targeted the aspects of perishability, quality of food, safety

standard, application of ICT, and losses face after the harvest (Routroy and Behera, 2017). The

problem that crops up for developing countries is how to reduce information asymmetry and

uncertainty (Routroy and Behera, 2017), which asks for immediate intervention. Thus, this

study builds on the premise of reducing the uncertainty by UOI and ultimately improving the

overall SCP. Agriculture is one of the major employment generating sectors in developing

nations, therefore, the identification of the right areas with right strategies is important to

enhance the overall improvement in ASC (agricultural supply chain). Unlike many other
studies in ASC, this study delivers the strategy of providing UOI and leading to SCC, reducing

VU that leads to SCP in developing nations.

Thirdly, previous works have discussed the changes in the prices in ASC due to weather,

uncertainty in terms of price and environment, but have not discussed reducing the uncertainty

(due to lack of right information), which is a major issue in developing economies’ ASC

(Routroy and Behera, 2017). This study stands different and unique by highlighting the role of

private players by eliminating middlemen and information asymmetry by bringing ICT and

improving the SCP.

5.1 Conclusion and discussion

This study addresses risk mitigation in the agricultural supply chain in developing

economies under the environment of information asymmetry and uncertainty from the demand

and supply sides, respectively. Based on real-life motivations, agricultural companies adopt

ICT-based technologies in different capacities to address agricultural solutions in different

contexts. One such capacity is risk mitigation due to high uncertainty in supply, which further

aggravates when marginalized farmers are sceptical of their product's future due to high

demand fluctuations attributed mainly to information asymmetry in the entire supply chain.

This study intends to capture whether digitization in different capacities contributes to

better SCC and thereby ensures high SCP. Developing nations like India have recently adopted

ICTs in the agricultural sector, and therefore, the industry is growing at different rates for

different companies.

5.2 Theoretical contribution

The paper has important theoretical implications. First, our paper contributes to

understanding digitization and supply chain literature in developing markets such as India.

Since very few studies had addressed the impact of digitization in emerging markets (Kamble,
Gunasekaran and Sharma, 2018; Tortorella and Fettermann, 2018); this study provides an

important extension on the discussion of leapfrogging from Industry 2.0 to Industry 4.0 in

developing markets such as India (Iyer, 2018). Second, the paper's contribution is to understand

the agricultural supply chain where suppliers belong to marginalized communities ("poor as

suppliers"). This provides additional challenges in deciding whether or not ICT technologies

should be installed based on firm size, the institutional environment that includes the level of

demand uncertainty and infrastructural support in rural areas (Sodhi and Tang, 2014).

5.3 Practice Implications

Towards the managerial contribution, this study indicates, that given the multitude of

smallholder farmers with a lack of information and resources, the private firms need to come

forward and take a stance on reducing agrarian distress by deploying ICT. The UOI will help

reduce the search costs, and lower and understand the price volatility and rising production

prices (De Janvry and Sadoulet, 2020). Implementing this approach shall reduce poverty and

improve coordination (de Janvry and Sadoulet, 2020) and lead to the improvement in SCP.

These interventions are aimed at improving:

• Ease of accessing the information about inputs used in agricultural processes. These

include technology to check the health of the soil, selection of the right type of

fertilizers, and pesticides, understanding seed quality and variety, weather-related

forecasts, etc.

• The production process includes the use of sensors to collect data related to the growth

of a particular type of crop continuously and furnishing the immediate advice and

inputs, bringing the automated harvesters into use for higher harvesting yields, etc.

• Helping in accessing the information about output markets that helps the farmers to

identify their selling channels in an informed way, including data about prices and

availability of various commodities in different markets in a neighbourhood.

5.4 Limitations and future scope

This paper has certain limitations. First, we considered a situation in the agricultural

sector where the UOI is rare in developing countries like India. This is because the rural sector

does not have the bandwidth to transform the agricultural supply chain towards Industry 4.0

(Ivanov et al., 2019). This creates a lacuna in understanding the nature of the business at the

field level and thereby shortens the total population concerning Agriculture 4.0 (Yost et al.,

2019) in developing nations like India. This provides an opportunity for future researchers to

delve deeper into such individual companies and understand the operational constraints and

needs which prompted them to use digitization as a tool. Second, our study focused on

understanding how SCP is enhanced through digitization from the perspective of agricultural

companies.

The agricultural companies may concede that due to ICTs, better SCC leads to SCP.

However, whether the farming community, especially the BoP segment, appreciates and

benefits from such collaboration is unknown. As a result, our study only addresses the concern

of SCP from digitization from the perspective of an upstream player (Hirose and Matsumura,

2017), as our target respondents were the firm's employees. Future studies need to conduct a

similar perspective from the downstream player and then validate whether digitization

contributes to SCP.

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Figures

Figure 1: Research framework and conceptual model

Tables
Table 1:Variables description and definition

Variable Description Definition Source

VU Volume VU is defined as the uncertainty of the Mishra et al.,
Uncertainty agricultural commodity in the entire supply 2007
chain.
UOI Use of The use of IT is defined as how an organization Boynton et
Information deploys IT to support operational and strategic al., 1994
Technology tasks.
SCC Supply Chain Tight coupling between SC partners in order to Cao and
Collaboration leverage the symbiotic benefits through process Zhang, 2011;
planning, target costing, technology Heide, &John
development and process development (1990
SCP Supply Chain The ability of the firm to perform on four Wagner and
Performance parameters, namely, order fill capacity, delivery Bode, 2008
dependability, customer satisfaction and
delivery speed
Table 2:Respondent's profile

Absolute
Demographic characteristics Scale numbers Percentage (%)
20-29 24 19.83
30-39 30 24.79
Age 40-49 23 19.01
50-59 30 24.79
60-69 14 11.57
Uttar Pradesh 13 10.74
Maharashtra 21 17.36
Rajasthan 15 12.40
Gujarat 12 9.92
State
Madhya Pradesh 23 19.01
Karnataka 13 10.74
Punjab 16 13.22
Chattisgarh 8 6.61
< 05 years 13 10.74
05 to < 10 Year 15 12.40
10 to < 15 Year 22 18.18
Age of the organization
15 to < 20 Year 19 15.70
20 to < 25 Year 23 19.01
>= 25 Years 29 23.97
<10 crore 25 20.66
10 to < 20 Crore 28 23.14
Annual revenue 20 to < 30 Crore 21 17.36
30 to < 40 Crore 17 14.05
>= 40 Crore 30 24.79
<500 24 19.83
500 to <1000 21 17.36
Number of employees in the
organization 1000 to <1500 26 21.49
1500 to <2000 23 19.01
>= 2000 27 22.31
<= High school 4 3.31
High school to< graduate 7 5.79
Educational level
Graduate 51 42.15
Postgraduate or more 59 48.76
Founder and Owner 12 9.92
President 4 3.31
CEO 5 4.13
Director 16 13.22
Designation Manager 25 20.66
Analyst 10 8.26
Engineer 36 29.75
Scientist 5 4.13
Clerk 8 6.61
Table 3: Measurement model results

Constructs Items λ µ σ α AVE CR

Production estimates are unreliable 0.836 2.608 1.093
There are frequent changes in
0.854 2.700 1.121
production volumes
Volume There is a gap in demand and supply
Uncertainty estimations 0.889 2.681 1.045 0.914 0.744 0.936

The inventory carrying costs are high 0.859 2.664 1.106

There are frequent shortages and
0.875 2.678 1.017
stock-outs of demand
Our Information Systems developed to:
Reduce the cost of business activities 0.658 6.442 0.516
Assist in monitoring, to control, and
Use of IT 0.944 6.233 0.681
designing business activities 0.815 0.738 0.892
Assist in formulating business
0.943 6.233 0.692
strategies
We are working closely with the respective supplier in:
Process development 0.708 6.083 0.637
Supply Chain
0.866 5.775 0.956
Collaboration Target costing 0.782 0.608 0.860
Technology development 0.833 5.917 0.904
Project planning 0.698 6.075 0.665
We provide the desired quantities
0.912 5.983 0.641
consistently
We meet the quoted or anticipated
delivery dates and quantities 0.856 5.842 0.808
Supply Chain consistently
0.873 0.725 0.913
Performance We meet customer satisfaction with
supply chain performance 0.825 5.992 0.625
consistently
We maintain the time between order
0.809 5.874 0.740
receipt and customer delivery
Table 4: Fornell-Larcker Criterion

Details [1] [2] [3] [4] [5] [6] [7] [8] [9] [10]
[1] Firm Size 1.00
[2] Age of Respondent 0.13 1.00
[3] Number of Employees 0.77 0.07 1.00
[4] Education 0.47 -0.02 0.39 1.00
[5] Designation -0.01 -0.16 0.02 -0.17 1.00
[6] Age of Organization 0.80 0.09 0.72 0.41 -0.04 1.00
[7] Volume Uncertainty -0.06 0.20 -0.11 -0.02 -0.13 -0.06 0.86
[8] Use of IT -0.05 -0.10 -0.08 0.12 -0.05 -0.13 -0.42 0.86
[9] SC Collaboration 0.03 -0.08 0.02 0.05 0.05 0.05 -0.32 0.33 0.78
[10] SC Performance 0.13 0.06 0.17 0.09 -0.05 0.15 -0.33 0.21 0.63 0.85
Note: Diagonals represent square roots of AVE
Table 5: Heterotrait-Monotrait Ratio (HTMT)

Details [1] [2] [3] [4] [5] [6] [7] [8] [9] [10]
[1] Firm Size
[2] Age of Respondent 0.13
[3] Number of Employees 0.77 0.07
[4] Education 0.47 0.02 0.39
[5] Designation 0.01 0.16 0.02 0.17
[6] Age of Organization 0.80 0.09 0.72 0.41 0.04
[7] Volume Uncertainty 0.06 0.21 0.12 0.03 0.14 0.07
[8] Use of IT 0.08 0.11 0.10 0.14 0.06 0.14 0.47
[9] SC Collaboration 0.09 0.17 0.05 0.08 0.06 0.06 0.37 0.41
[10] SC Performance 0.14 0.11 0.18 0.09 0.08 0.16 0.37 0.25 0.74
Table 6: Structural estimates (Hypotheses Testing)

Relationships # Β T P F-S
Controls
Firm Size -> Use of IT 0.130 0.768 0.443 0.006
Firm Size -> SC Collaboration -0.040 0.184 0.854 0.000
Firm Size -> SC Performance -0.044 0.295 0.768 0.001
Age of Respondent -> Use of IT -0.008 0.098 0.922 0.000
Age of Respondent -> SC Collaboration -0.005 0.065 0.948 0.000
Age of Respondent -> SC Performance 0.122 1.615 0.107 0.025
Number of Employees -> Use of IT -0.107 0.700 0.484 0.006
Number of Employees -> SC Collaboration -0.042 0.288 0.773 0.001
Number of Employees -> SC Performance 0.131 1.286 0.199 0.012
Education -> Use of IT 0.186 1.817 0.070 0.034
Education -> SC Collaboration 0.010 0.120 0.905 0.000
Education -> SC Performance 0.002 0.028 0.977 0.000
Designation -> Use of IT -0.081 1.016 0.310 0.008
Designation -> SC Collaboration 0.038 0.408 0.683 0.002
Designation -> SC Performance -0.080 1.454 0.146 0.011
Age of Organization -> Use of IT -0.261 1.765 0.078 0.030
Age of Organization -> SC Collaboration 0.126 0.784 0.433 0.006
Age of Organization -> SC Performance 0.034 0.263 0.793 0.001
Specific Indirect Effects
VU -> Use of IT -> SC Performance H1 0.017 0.394 0.694
VU -> Use of IT -> SC Collaboration H2 -0.111 2.608 0.009
VU -> SC Collaboration -> SC Performance H3 -0.120 1.192 0.234
Use of IT -> SC Collaboration -> SC Performance H4 0.149 2.216 0.027
VU -> Use of IT -> SC Collaboration -> SC Performance H5 -0.066 2.232 0.026
Note: [#- Hypothesis number], [β – Beta coefficients], [T – t stats], [P – p significance value],
[F-S: f square for effect size]