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Network strength, transaction‐specific investments, inter‐personal trust, and relationship satisfaction in Chinese agri‐food SMEs

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  • Hualiang Lu
  • Shuyi Feng
  • Jacques H. Trienekens
  • S.W.F. Omta

Abstract

Purpose - The purpose of this paper is to investigate the effects of network strength, transaction‐specific investments and inter‐personal trust on business relationship satisfaction for small‐and‐medium‐sized enterprises (SMEs) involved in agri‐food processing and exporting in China. Design/methodology/approach - Survey data collected from 80 agri‐food SMEs in Jiangsu Province were used for empirical testing. The authors applied an ordered logit regression approach for model estimation. Findings - The results demonstrate that strongguanxinetworks, high level of transaction‐specific investments and inter‐personal trust significantly contribute to a high level of relationship satisfaction for agri‐food SMEs in China. In addition, inter‐personal trust shows a moderating effect on the relationship between transaction‐specific investments and relationship satisfaction. Practical implications - Business relationships play a critical role in the modern market environment. Relational arrangements (based onguanxiand inter‐personal trust) should be further enhanced in order to yield satisfied business relationships for SMEs in China. Originality/value - The paper extends our understanding of relationship (guanxi) marketing, as well as marketing practices for agri‐food SMEs in China.

Suggested Citation

  • Hualiang Lu & Shuyi Feng & Jacques H. Trienekens & S.W.F. Omta, 2012. "Network strength, transaction‐specific investments, inter‐personal trust, and relationship satisfaction in Chinese agri‐food SMEs," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 4(3), pages 363-378, August.
    • Handle: RePEc:eme:caerpp:v:4:y:2012:i:3:p:363-378
    DOI: 10.1108/17561371211263374
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    References listed on IDEAS

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