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The Efficiency of Customer Relationships: An Empirical Analysis of China’s Agricultural Wholesale Market

Author

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  • Wang, Zhigang
  • Ma, Jianlei
  • Jones, Eugene

Abstract

As in most developing countries, agricultural wholesale markets in China operate under imperfect market conditions. Traders are separated and volatile, information services are unavailable or poor, and formal credit or insurance is unavailable to traders. To deal with these circumstances, some traders have developed working relationships with their customers. This paper addresses the newly established relationships between agricultural traders and their customers within China’s wholesale markets. Important findings of the paper are (1) improved customer relationships lead to higher profits for traders; and (2) improved customer relationships lead traders to increase their use of variable capital, permanent labor, and temporary labor.

Suggested Citation

  • Wang, Zhigang & Ma, Jianlei & Jones, Eugene, 2010. "The Efficiency of Customer Relationships: An Empirical Analysis of China’s Agricultural Wholesale Market," Journal of Food Distribution Research, Food Distribution Research Society, vol. 41(3), pages 1-10, November.
    • Handle: RePEc:ags:jlofdr:139068
    DOI: 10.22004/ag.econ.139068
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    References listed on IDEAS

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    4. Jeffrey H. Dyer & Wujin Chu, 2003. "The Role of Trustworthiness in Reducing Transaction Costs and Improving Performance: Empirical Evidence from the United States, Japan, and Korea," Organization Science, INFORMS, vol. 14(1), pages 57-68, February.
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