Changing Paradigm of Fair Trade
Purpose: This paper examines why social entrepreneurs in the United States choose to operate an entirely fair trade business and the factors that affect fair trade social entrepreneurship. Fair trade seeks to benefit producers in developing countries by providing a market for their goods in developed countries. Fair trade enables all parties in the supply chain to make living wages and/or a profit. Design/methodology/approach: Using a qualitative multiple case study approach of social entrepreneurs in 35 U.S. fair trade companies, we develop a model and nine propositions to explain our findings. Findings: We identify three primary motivational factors (ethical belief, religious faith, and business values), four contributory factors that strengthen fair trade engagement (family member involvement, the trend toward for-profit status, industry professionalism, and consumer education), and three negative factors that work to discourage involvement (loss of identity, lack of industry consensus, and the shortage of retailers). We conclude by using our findings to consider the future of U.S. fair trade social entrepreneurship. Research limitations: We recognize limitations due to our sample size. Practical implications: We believe that fair trade is worthy of further study and increased awareness. Social implications: Increased awareness of fair trade may lead to better consumer buying decisions. Originality/value: We contribute to the development of theory in the study of fair trade, which has rarely been studied in the context of U.S. social entrepreneurs.