IDEAS home Printed from https://ideas.repec.org/a/eee/iburev/v16y2007i4p474-493.html
   My bibliography  Save this article

What are the drivers of channel length? Distribution reform in The People's Republic of China

Author

Listed:
  • Jaffe, Eugene Donald
  • Yi, Ling

Abstract

The objective of this paper is to develop a model for analyzing the relative importance of the predictors of channel length. Identifying and explaining the factors that influence channel length is one of the most important tasks of channel research. The focus of this paper is The People's Republic of China (hereafter, PRC). The PRC is in transition from a planned to a market economy. As the economy evolves from a planning orientation to a market orientation, distribution structure reform is a critical factor in this process. Yet, very little is known about the factors that shape a nation's channel system. Understanding how improvements in distribution systems contribute to economic development can aid decision-makers in developing countries to improve resource allocation. Drawing from channel structure theory, the proposed model hypothesizes that channel length is a function of economic development, consumption, consumer mobility/outreach, urbanization and government policy. Both cross-sectional and time-series analyses were used for hypothesis testing. The results show that economic development, government policy and consumption are predictors of channel length. These findings show that government policy can aid market reform as economic development takes place, Moreover, the findings show that the evolution of distribution channels is not unidirectional as hypothesized by some, but channels may evolve from short to long and then shorten again.

Suggested Citation

  • Jaffe, Eugene Donald & Yi, Ling, 2007. "What are the drivers of channel length? Distribution reform in The People's Republic of China," International Business Review, Elsevier, vol. 16(4), pages 474-493, August.
    • Handle: RePEc:eee:iburev:v:16:y:2007:i:4:p:474-493
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969593107000558
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Samiee, Saeed, 1993. "Retailing and channel considerations in developing countries: A review and research propositions," Journal of Business Research, Elsevier, vol. 27(2), pages 103-129, June.
    2. Veeck, Ann & Veeck, Gregory, 2000. "Consumer Segmentation and Changing Food Purchase Patterns in Nanjing, PRC," World Development, Elsevier, vol. 28(3), pages 457-471, March.
    3. Gajewski, Stanislaw, 1992. "Consumer behavior in economics of shortage," Journal of Business Research, Elsevier, vol. 24(1), pages 5-10, January.
    4. Boyle, Brett A. & Dwyer, F. Robert, 1995. "Power, bureaucracy, influence, and performance: Their relationships in industrial distribution channels," Journal of Business Research, Elsevier, vol. 32(3), pages 189-200, March.
    5. Franklyn D Holzman, 1991. "Moving Toward Ruble Convertibility," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 33(3), pages 3-66, September.
    6. Iwinska-Knop, Krystyna, 1992. "Distribution as a barrier to application of marketing in the centrally planned economy (case study of Poland)," Journal of Business Research, Elsevier, vol. 24(1), pages 19-25, January.
    7. Erin Anderson, 1985. "The Salesperson as Outside Agent or Employee: A Transaction Cost Analysis," Marketing Science, INFORMS, vol. 4(3), pages 234-254.
    8. K. Sridhar Moorthy, 1988. "Strategic Decentralization in Channels," Marketing Science, INFORMS, vol. 7(4), pages 335-355.
    9. Richard H. Holton, 1953. "Marketing Structure and Economic Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 67(3), pages 344-361.
    10. McMillan, John & Naughton, Barry, 1992. "How to Reform a Planned Economy: Lessons from China," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 8(1), pages 130-143, Spring.
    11. Wu, Chongqi & Mallik, Suman, 2005. "Channel Structure, Cross Sales, and Vertical Integration in a Multi-channel Distribution System," Working Papers 05-0127, University of Illinois at Urbana-Champaign, College of Business.
    12. Nee, Victor & Cao, Yang, 2005. "Market Transition and the Firm: Institutional Change and Income Inequality in Urban China," Management and Organization Review, Cambridge University Press, vol. 1(1), pages 23-56, March.
    13. Timothy W. McGuire & Richard Staelin, 1983. "An Industry Equilibrium Analysis of Downstream Vertical Integration," Marketing Science, INFORMS, vol. 2(2), pages 161-191.
    14. Jean J Boddewyn, 1981. "Comparative Marketing: The First Twenty five Years1," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 12(1), pages 61-79, March.
    15. Livesay, Harold C. & Porter, Patrick G., 1969. "Vertical Integration in American Manufacturing, 1899 – 1948," The Journal of Economic History, Cambridge University Press, vol. 29(3), pages 494-500, September.
    16. Wei-yu Kevin Chiang & Dilip Chhajed & James D. Hess, 2003. "Direct Marketing, Indirect Profits: A Strategic Analysis of Dual-Channel Supply-Chain Design," Management Science, INFORMS, vol. 49(1), pages 1-20, January.
    17. Sudheer Gupta & Richard Loulou, 1998. "Process Innovation, Product Differentiation, and Channel Structure: Strategic Incentives in a Duopoly," Marketing Science, INFORMS, vol. 17(4), pages 301-316.
    18. Weitzman, Martin L., 1993. "Economic transition: Can theory help?," European Economic Review, Elsevier, vol. 37(2-3), pages 549-555, April.
    19. V. Kasturi Rangan, 1987. "The Channel Design Decision: A Model and an Application," Marketing Science, INFORMS, vol. 6(2), pages 156-174.
    20. V. Kasturi Rangan & Ramchandran Jaikumar, 1991. "Integrating Distribution Strategy and Tactics: A Model and an Application," Management Science, INFORMS, vol. 37(11), pages 1377-1389, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dost, Florian, 2015. "A non-linear causal network of marketing channel system structure," Journal of Retailing and Consumer Services, Elsevier, vol. 23(C), pages 49-57.
    2. Edgard Barki & Felipe Zambaldi & Carlos Eduardo Lourenço & Cristiano do Amaral Britto De Castro, 2016. "Store patronage and retail competition in emerging markets," International Journal of Business and Systems Research, Inderscience Enterprises Ltd, vol. 10(1), pages 62-77.
    3. Dong, Maggie Chuoyan & Tse, David K. & Cavusgil, S. Tamer, 2008. "Efficiency of governance mechanisms in China's distribution channels," International Business Review, Elsevier, vol. 17(5), pages 509-519, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Krafft, Manfred & Goetz, Oliver & Mantrala, Murali & Sotgiu, Francesca & Tillmanns, Sebastian, 2015. "The Evolution of Marketing Channel Research Domains and Methodologies: An Integrative Review and Future Directions," Journal of Retailing, Elsevier, vol. 91(4), pages 569-585.
    2. Kong-Wing, Clement Chow, 1997. "Pre-commitment vs. flexibility: Uncertainty and distribution reform in P.R. China," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 26(1), pages 59-78.
    3. Dmitri Kuksov & Chenxi Liao, 2023. "Restricting Speculative Reselling: When “How Much” Is the Question," Marketing Science, INFORMS, vol. 42(2), pages 377-400, March.
    4. Li, Bai-Xun & Zhou, Yong-Wu & Li, Ji-zi & Zhou, Shi-ping, 2013. "Contract choice game of supply chain competition at both manufacturer and retailer levels," International Journal of Production Economics, Elsevier, vol. 143(1), pages 188-197.
    5. Lee, Sunghee & Yoo, Shijin & Kim, Daeki, 2016. "When is servitization a profitable competitive strategy?," International Journal of Production Economics, Elsevier, vol. 173(C), pages 43-53.
    6. Xiaojing Li & Xingzheng Ai, 2021. "A choice of selling format in the online marketplace with cross-sales supply chain: Platform selling or traditional reselling?," Electronic Commerce Research, Springer, vol. 21(2), pages 393-422, June.
    7. Jianhua Ma & Xingzheng Ai & Wen Yang & Yanchun Pan, 2019. "Decentralization versus coordination in competing supply chains under retailers’ extended warranties," Annals of Operations Research, Springer, vol. 275(2), pages 485-510, April.
    8. Yunchuan Liu & Z. John Zhang, 2006. "Research Note—The Benefits of Personalized Pricing in a Channel," Marketing Science, INFORMS, vol. 25(1), pages 97-105, 01-02.
    9. Xiao, Tiaojun & Choi, Tsan-Ming, 2009. "Purchasing choices and channel structure strategies for a two-echelon system with risk-averse players," International Journal of Production Economics, Elsevier, vol. 120(1), pages 54-65, July.
    10. Bruno Jullien & Markus Reisinger & Patrick Rey, 2023. "Personalized Pricing and Distribution Strategies," Management Science, INFORMS, vol. 69(3), pages 1687-1702, March.
    11. Li, Xiaojing & Chen, Jing & Ai, Xingzheng, 2019. "Contract design in a cross-sales supply chain with demand information asymmetry," European Journal of Operational Research, Elsevier, vol. 275(3), pages 939-956.
    12. Li, Wei & Zhao, Xuan & Chen, Jing, 2023. "Co-opetition or decentralization? A study of manufacturers’ sourcing and distribution strategies," European Journal of Operational Research, Elsevier, vol. 311(3), pages 867-886.
    13. Cao, Wen & Jiang, Bo & Zhou, Deming, 2010. "The effects of demand uncertainty on channel structure," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1471-1488, December.
    14. Salvatore Piccolo & Markus Reisinger, 2011. "Exclusive Territories and Manufacturers' Collusion," Management Science, INFORMS, vol. 57(7), pages 1250-1266, July.
    15. Gangshu (George) Cai & Yue Dai & Sean X. Zhou, 2012. "Exclusive Channels and Revenue Sharing in a Complementary Goods Market," Marketing Science, INFORMS, vol. 31(1), pages 172-187, January.
    16. Upender Subramanian & Jagmohan S. Raju & Z. John Zhang, 2013. "Exclusive Handset Arrangements in the Wireless Industry: A Competitive Analysis," Marketing Science, INFORMS, vol. 32(2), pages 246-270, March.
    17. Fang Fang & Baojun Jiang & Jiong Sun, 2023. "Partial vertical ownership in the presence of downstream competition," Production and Operations Management, Production and Operations Management Society, vol. 32(6), pages 1692-1704, June.
    18. Greg Shaffer & Florian Zettelmeyer, 2002. "When Good News About Your Rival Is Good for You: The Effect of Third-Party Information on the Division of Channel Profits," Marketing Science, INFORMS, vol. 21(3), pages 273-293, November.
    19. Anil Arya & Brian Mittendorf & David E. M. Sappington, 2007. "The Bright Side of Supplier Encroachment," Marketing Science, INFORMS, vol. 26(5), pages 651-659, 09-10.
    20. Qijun Qiu & Ying-Ju Chen & Benjamin P.-C. Yen, 2018. "The Implications of Group-Buying as a Channel Option Under Capacity Constraint," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 35(04), pages 1-32, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:iburev:v:16:y:2007:i:4:p:474-493. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.