How COVID-19 Influences the Food Supply Chain: An Empirical Investigation of Developing Countries
Corresponding email: j.aldouri@ammanu.edu.jo
Published at : 19 Apr 2021
Volume : IJtech
Vol 12, No 2 (2021)
DOI : https://doi.org/10.14716/ijtech.v12i2.4391
Al-Doori, J.A., Khdour, N., Shaban, E.A., al Qaruty, T.M., 2021. How COVID-19 Influences the Food Supply Chain: An Empirical Investigation of Developing Countries. International Journal of Technology. Volume 12(2), pp. 371-377
| Jamal Ahmed Al-Doori | Business Administration, Al-Ahliyya Amman University Al-Saro, Al-Salt, Amman, Jordan |
| Naser Khdour | Business Administration, Al-Ahliyya Amman University Al-Saro, Al-Salt, Amman, Jordan |
| Eyad A. Shaban | Business Administration, Al-Ahliyya Amman University Al-Saro, Al-Salt, Amman, Jordan |
| Tamara Mahmoud al Qaruty | Business Administration, Al-Ahliyya Amman University Al-Saro, Al-Salt, Amman, Jordan |
A
supply chain is a network of organizations that due to globalization are all
deeply connected. If there is a disruption to one of those organizations, it
can destroy the system, which will ultimately influence the economy and
especially the population. It has been found that COVID-19 has negatively
affected most nations around the globe. Developing countries have suffered the
most due to a lack of resources. After an extensive literature review, it can
be concluded that the greatest challenges were experienced in the food supply
chain; industries were halted, but people needed enough food to survive. This
study aimed to verify the impact of COVID-19 on the economy and food supply
chain of Iraq. Six hypotheses were developed and data were collected from the
Iraqi food supply chain. The data were cleaned and then analyzed through
SmartPLS. It was found that COVID-19 has caused a high rate of inflation and
decreased the human development index rate. Although several countries have
lowered their interest rate, the advantages of this have failed to reach
ordinary people. This study will help the government and managers in the food
supply chain industry in their decision-making processes. The study will also
support researchers in developing new theories in this regard.
COVID-19; Food industry; Supply chain
The study tests the performance of aid companies in Iraq through task–technology fit, examining the impact of information system compatibility, information technology, and new technologies on performance. Research supports the idea that more procurement processes should be considered (Al-Doori, 2018). To get the best return on investment, managers should focus on devoting resources to information technology to enhance performance. How can a company improve its overall performance? The use of raw or new materials will become less important. Appropriate technologies reduce carbon emissions, helping to stabilize the environment (Hapsari et al., 2019). This new space occupied by organizations will create new investments and job opportunities as more skilled people are hired to benefit from their expertise (Shahbaz et al., 2020a). This research helps to create awareness among the supply chain of metalworking companies and motivates them to turn their traditional supply chains into functional ones. Information on reuse and supply chains has already been created, but now is the time to take action (Areiqat and Al-Doori, 2018).
Internal lean practices eliminate the waste
of money and time within the supply chain system (Goransson, 2019). The term “lean” pertains to a system that uses less input to
supply at a mass-production speed and at regular intervals, ultimately
providing additional benefits (or value added) (Silpcharu and Thaisom, 2020). Supply chain managers have a better understanding of chain
management needs and, therefore, can support the strategic decision-making
process to help firms remain competitive in the market place (Al-Doori et al., 2020). Open sharing of knowledge
regarding inventory levels, forecasts, marketing, and selling techniques can
reduce the uncertainty between stakeholders and result in improved performance (Bai, 2011).
In this section, past research is mentioned
to identify a theoretical framework and potential hypotheses for this study (Aung and Chang, 2014).
1.1. Food Supply Chain
The
sector has created job opportunities in the domestic market (World Food Programme, 2020). According to the Iraq Food Industries
Union, the most important food processing industries in the West Bank are
related to the agricultural products targeted for this purpose: canned
vegetables and fruits (Gunasekaran et al., 2001;
Shahbaz et al., 2020b). In Iraq, there are only a few
industries that specialize in producing canned vegetables and fruits, and they
currently employ hundreds of workers. Investment in this industry is estimated
to be in the millions. These products make up around 20% of the total market
capitalization and around 30% of the market (Singh, 2018), and make a major contribution to total
exports (Akhtar, 2013).
1.2. Economic Conditions During COVID-19
The food industry has been operating for
centuries. It has recently grown rapidly and is now considered an essential
factor of economic growth in many countries (United Nations Development Programme, 2016). It is noted that China currently leads in exports (Amuda, 2020). In Iraq, the food supply
chain is highly ranked around the world in terms of foreign exchange (Shahbaz et al., 2020c). The present study focuses
on those factors to assess the effect of economic indicators on commercial
performance within the food industries of developing countries (European Environment Agency, 2019). Therefore, the purpose of the present study is to examine the
role of economic indicators in the performance of selling goods (Al-Doori, 2020). Studies have revealed that
economic indicators have a significant effect in developing countries (World Bank Group, 2017).
1.3. COVID-19
Impact on Economy
It has been found that 426,000 food organizations were badly
impacted due to a sudden halt of operations during the COVID-19 outbreak (Hakimah et al., 2019). Most of these organizations indirectly impact the inflation rate
and human development as they are directly linked to a basic need of humanity (Nikou and Selamat, 2013). Most registered beneficiaries (99 percent) in developing
countries work with national institutions to enhance the capacity of the economy
and assist the poor and vulnerable through social safety nets following the job
losses linked to COVID-19-related closures (Zusmelia et al., 2020).
1.4. Research Framework and Hypotheses
After an extensive literature
review, it has been found that COVID-19 has caused a high inflation rate, a
high interest rate, and a decrease in the human development index (HDI) rate.
This has had a drastic negative impact on the Iraqi economy and specifically on
the food supply chain. Thus, the below framework has been adopted and needs to
be verified empirically.
Figure 1 Research Framework1: An increasing inflation rate negatively affects the food supply chain of Iraq
Inflation has a significant relationship with the
acquisition of products and services. The food supply chain supports the
transfer of products and services; therefore, it has a significant impact on
inflation. Inflation raises prices, which negatively affects purchasing power (United Nations Development Programme, 2016). A
model of the underlying assets is shown in Figure 1 and is proposed by the
hypotheses (Olson and Wu, 2011). A
country usually has a better HDI when education indicators have higher values,
which also results in a higher gross domestic product (GDP) per capita (Hakimah et al., 2019).
However, political influence can interfere with money matters (Goransson, 2019).
Therefore, it is to the customer's advantage to permit the installment from the
supplier to expire (Singh, 2018).
The HDI is one of the integrated indicators,
alongside individual income, life expectancy and education, of the four stages
of human development (United Nations Development Programme, 2016). HDI is
one of the key development indicators, with a robust relationship to GDP and
procurement performance in various firms (World Food Programme, 2020).
Therefore, the hypotheses below are proposed (Koroleva et al., 2020).
H2: An
increasing interest rate negatively affects the food supply chain of Iraq
H3: An
increasing HDI positively affects the food supply chain of Iraq
H4: An
increasing HDI positively affects the GDP of Iraq
H5: An
increasing GDP positively affects the food supply chain of Iraq
It can
be concluded that although various countries have taken innovative measures to
handle the COVID-19 pandemic, developing countries were not prepared for such a
gigantic incident. Developed countries had enough resources to manage the
unusual situation, but developing countries, with their scarce resources, were
highly dependent on support from developed countries. Nonetheless, developed
countries also suffered as it was found that COVID-19 negatively affected the
inflation rate and human development index rate, which ultimately hamstrung
economies and food supply chains. This study recommends that decision-makers
involve all stakeholders in decision making. This will only be possible when there
is enough information flow through the internet. Future studies can be
conducted based on theory and suggest more mitigation strategies.
Akhtar,
P., 2013. Determinants of Coordination Effectiveness of Selected
International Agri-Food Supply Chains: A Structural Equation Modelling Approach.
Master’s Thesis, Graduate Program, Massey University, Palmerston North, New
Zealand
Al-Doori,
J.A., 2018. The Impact of Supply Chain Management Approaches on Supply Chain
Performance in Iraq. International Journal of Supply Chain Management, Volume 7(5),
pp. 13–21
Al-Doori,
J.A., 2020. The Impact of Lean Practices on Operational Performance in the
Banking Sector: An Empirical Investigation. International Journal of
Services and Operations Management, Volume 37(1), pp. 27–39
Al-Doori,
J.A., Aldabbagh, I., Mohammad, M.M., Qawasmeh, R., 2020. The Impact of Islamic
Work Ethics on Job Performance with Mediating Role of Intrinsic
Motivation. Academy of Strategic Management Journal, Volume
19(2), pp. 1–11
Al-Doori,
J.A., Alhorani, A., Areiqat, A.Y., 2019. The Role of Just in Time, Total
Quality Management, and Supply Chain Management toward Better Operational
Performance. The Journal of Social Sciences Research, Volume
5(4), pp. 949–956
Amuda,
Y.J., 2020. Impact of Coronavirus on Small and Medium Enterprises (SMEs):
Towards Post-Covid-19 Economic Recovery in Nigeria. Academy of Strategic
Management Journal, Volume 19(6), pp. 1–11
Areiqat,
A.Y., Al-Doori, J.A., 2018. The Role of Electronic Training in Employee
Performance Development. International Journal of Advances in
Agriculture Sciences, Volume 7(6), pp. 10–15
Aung,
M.M., Chang, Y.S., 2014. Traceability in a Food Supply Chain: Safety and
Quality Perspectives. Food Control, Volume 39, pp. 172–184
Bai,
L., 2011. Exploratory Study of Environmentally Sustainable Supply Chain in
New Zealand Food Industry. Master’s Thesis, Graduate Program, Massey
University, Palmerston North, New Zealand
European
Environment Agency, 2019. Economy and Development, Volume 53 Issue 9
Farissi,
A., El Oumami, M., Beidouri, Z., 2021. Assessing Lean Adoption in Food
Companies: The Case of Morocco. International Journal of Technology,
Volume 12(1), pp. 5–14
Goransson,
M., 2019. Dynamically Predicted Shelf-life Service: Exploring and Evaluating
a Potential Sustainable Food Supply Chain Innovation. Master’s Thesis,
Graduate Program, Lund University, Lund, Sweden
Gunasekaran,
A., Patel, C., Tirtiroglu, E., 2001. Performance Measures and Metrics in a
Supply Chain Environment. International Journal of Operations & Production
Management, Volume 21(1/2), pp. 71–87
Hakimah,
Y., Hildayanti, S.K., Nugraha, A.T., 2019. Influence of Economic Indicators on
Supply Chain: Evidence from Indonesian Fishing Industry. International
Journal of Supply Chain Management, Volume 8(5), pp. 854–863
Hapsari,
K.L., Tharifa, F., Moersidik, S.S., Adityosulindro, S., Priadi, C.R., 2019. The
Effect of Magnesium Sulfate Addition on Volatile Solid Destruction and Chemical
Oxygen Demand Reduction of Food Waste Anaerobic Digestion. International Journal
of Technology, Volume 10(8), pp. 1602–1608
Koroleva,
E., Baggieri, M., Nalwanga, S., 2020. Company Performance: Are Environmental,
Social, and Governance Factors Important? International Journal of
Technology. Volume 11(8), pp. 1468–1477
Nikou,
S., Selamat, H., 2013. Risk Management Capability within Malaysian Food Supply
Chains. International Journal of Agriculture and Economic Development,
Volume 1(1), pp. 37–54
Olson,
D.L., Wu, D., 2011. Risk Management Models for Supply Chain: A Scenario
Analysis of Outsourcing to China. Supply Chain Management: An International
Journal, Volume 16(6), pp. 401–408
Prakash,
S., Soni, G., Rathore, A.P.S., Singh, S., 2017. Risk Analysis and Mitigation
for Perishable Food Supply Chain: A Case of Dairy Industry. Benchmarking: An
International Journal, Volume 24(1), pp. 2–23
Shahbaz,
M.S., Mubarik, M.S., Mubarak, M.F., Irshad, M.B., 2019a. The Impact of Lean
Practices on Educational Performance: An Empirical Investigation for Public
Sector Universities of Malaysia. Journal of Independent Studies and
Research-Management, Social Sciences and Economics, Volume 17(2), pp. 85–96
Shahbaz,
M.S., Othman, B.A., Salman, P.M., Memon, D.A., Rasi, R.Z.B.R., 2020a. A
Proposed Conceptual Action Plan for Identification, Assessment and Mitigation
of Supply Chain Risks. International Journal of Advanced Operations
Management, Volume 12(1), pp. 65–80
Shahbaz,
M.S., Qureshi, M.A., Sohu, S., Keerio, M.A., 2020b. The Impacts of Operational
Risks in the Supply Chain of Construction Projects in Malaysia. Tehnicki
Vjesnik, Volume 27(6), pp. 1887–1893
Shahbaz,
M.S., Shaikh, F.A., Qureshi, M.A., Jamali, Q.B., Sohu, S., 2019b. The Influence
of Supply Chain Collaboration on Supply Chain Performance for Malaysian
Manufacturing Industry. Journal of Organizational Behavior Research,
Volume 4(2), pp. 203–218
Shahbaz,
M.S., Soomro, A.B., Soomro, S., Sohu, S., Ahmed, B., 2020c. The Role of Supply
Chain Relationships in Risk Management by Enhancing Customer Satisfaction. International
Journal of Disaster Recovery and Business Continuity, Volume 11(1), pp.
1756–1765
Silpcharu,
T., Thaisom, R., 2020. Guidelines in Applying Sufficiency Economy Philosophy to
Enhance Sustainable Success in Business. Academy of Strategic Management
Journal, Volume 19(6), pp. 1–6
Singh,
A., 2018. Improving Efficiency and Reducing Waste for Sustainable Beef
Supply Chain. Dissertation for Degree of Doctor of Philosophy, Graduate
Program, Norwich Business School, University of East Anglia, United Kingdom
United
Nations Development Programme, 2016. Human Development Report 2016, New
York
World
Bank Group, 2017. Prospects for Growth and Jobs in the Palestinian Economy:
A General Equilibrium Analysis. Public Disclosure Authorized, Washington,
DC
World
Food Programme, 2020. WFP Palestine Country Brief: August 2020
Zusmelia,
Ansofino, Noer, M., Iswandi, Momon, Dahen, L.D., Rosya, N.D., 2020. Strategies to
Manage Regional Development Inequality for Economic Recovery During the
Covid-19 Period. Academy of Strategic Management Journal, Volume 19(1),
pp. 1–28