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Farmer‐buyer relationships in China: the effects of contracts, trust and market environment

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  • Xiaoyong Zhang
  • Dinghuan Hu

Abstract

Purpose - The purpose of this paper is first, to develop constructs to measure three important concepts in the supply chain literature: contracts, trust and market environment, in the Chinese context and to further investigate the relationships amongst these three concepts based on the formulated hypothesis. Design/methodology/approach - The research methodology has strictly followed the recommended scale development procedures, which include specifying each constructs, item generation, data collection, reliability and validity test, and finally test hypothesis. The primary data were collected in October 2008 in Hubei Province, China. Both exploratory factor analysis and confirmatory factor analysis are applied to assess the reliability and validity of the three constructs. Findings - In total, 22 items were retained to measure six dimensions for the three core concepts: contract (marketing and production), trust (reliability and benevolence), and market environments (diversity and volatility). Second, the finding supported this argument that contracts and trust functions as complements. Furthermore, a positive relationship between environmental uncertainty and the use of contractual governance was found. Research limitations/implications - The measurement model for environmental volatility is less satisfied. More research should be carried out on the measurement of market environment in the future. Originality/value - This paper identifies and validates key constructs underlying supply chain management research: contract, trust and market environment, in a Chinese context. These measurable concepts could be applied in similar settings to further investigate small‐scale farmer's position along the supply chain.

Suggested Citation

  • Xiaoyong Zhang & Dinghuan Hu, 2011. "Farmer‐buyer relationships in China: the effects of contracts, trust and market environment," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 3(1), pages 42-53, February.
    • Handle: RePEc:eme:caerpp:v:3:y:2011:i:1:p:42-53
    DOI: 10.1108/17561371111103534
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    Citations

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    Cited by:

    1. Federica Di Marcantonio & Pavel Ciaian & Jan Fałkowski, 2020. "Contracting and Farmers’ Perception of Unfair Trading Practices in the EU Dairy Sector," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(3), pages 877-903, September.
    2. Dušanka Gajdić & Željka Mesić & Kristina Petljak, 2021. "Preliminary Research about Producers’ Perceptions of Relationship Quality with Retailers in the Supply Chain of Organic Food Products in Croatia," Sustainability, MDPI, vol. 13(24), pages 1-41, December.
    3. Lin Li & Hongdong Guo & Jos Bijman & Nico Heerink, 2018. "The influence of uncertainty on the choice of business relationships: The case of vegetable farmers in China," Agribusiness, John Wiley & Sons, Ltd., vol. 34(3), pages 597-615, June.
    4. Daniel Kangogo & Domenico Dentoni & Jos Bijman, 2020. "Determinants of Farm Resilience to Climate Change: The Role of Farmer Entrepreneurship and Value Chain Collaborations," Sustainability, MDPI, vol. 12(3), pages 1-15, January.
    5. Alemu, Abebe Ejigu & Adesina, Jimi, 2015. "Effects of cooperatives and contracts on rural income and production in the dairy supply chains: Evidence from Northern Ethiopia," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 10(4), pages 1-16, December.
    6. Mengshuai Zhu & Chen Shen & Yajun Tian & Jianzhai Wu & Yueying Mu, 2022. "Factors Affecting Smallholder Farmers’ Marketing Channel Choice in China with Multivariate Logit Model," Agriculture, MDPI, vol. 12(9), pages 1-11, September.
    7. Joanita Kataike & Xavier Gellynck, 2018. "22 Years of Governance Structures and Performance: What Has Been Achieved in Agrifood Chains and Beyond? A Review," Agriculture, MDPI, vol. 8(4), pages 1-32, March.

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