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

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Author Info

  • Hualiang Lu
  • Shuyi Feng
  • Jacques H. Trienekens
  • S.W.F. Omta
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    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 strong guanxi networks, 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 on guanxi and 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.

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    File URL: http://www.emeraldinsight.com/journals.htm?issn=1756-137x&volume=4&issue=3&articleid=17051137&show=abstract
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    Bibliographic Info

    Article provided by Emerald Group Publishing in its journal China Agricultural Economic Review.

    Volume (Year): 4 (2012)
    Issue (Month): 3 (October)
    Pages: 363-378

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    Handle: RePEc:eme:caerpp:v:4:y:2012:i:3:p:363-378

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    Web page: http://www.emeraldinsight.com

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    Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
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    Related research

    Keywords: Buyer-seller relationships; China; Guanxi; Relationship marketing; Relationship satisfaction; Small to medium-sized enterprises;

    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Willem Ziggers, Gerrit & Trienekens, Jacques, 1999. "Quality assurance in food and agribusiness supply chains: Developing successful partnerships," International Journal of Production Economics, Elsevier, vol. 60(1), pages 271-279, April.
    2. Erin Anderson & Barton Weitz, 1989. "Determinants of Continuity in Conventional Industrial Channel Dyads," Marketing Science, INFORMS, vol. 8(4), pages 310-323.
    3. Chao Chen & Xiao-Ping Chen, 2009. "Negative externalities of close guanxi within organizations," Asia Pacific Journal of Management, Springer, vol. 26(1), pages 37-53, March.
    4. Nooteboom, Bart, 1995. "Trust, opportunism and governance," Research Report 95B34, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    5. Chenting Su & Zhilin Yang & Guijun Zhuang & Nan Zhou & Wenyu Dou, 2009. "Interpersonal influence as an alternative channel communication behavior in emerging markets: The case of China," Journal of International Business Studies, Palgrave Macmillan, vol. 40(4), pages 668-689, May.
    6. Calum G. Turvey & Rong Kong & Xuexi Huo, 2010. "Borrowing amongst friends: the economics of informal credit in rural China," China Agricultural Economic Review, Emerald Group Publishing, vol. 2(2), pages 133-147, May.
    7. Hualiang Lu & Shuyi Feng & Jacques H. Trienekens & S.W.F. (Onno) Omta, 2008. "Performance in vegetable supply chains: the role of Guanxi networks and buyer-seller relationships," Agribusiness, John Wiley & Sons, Ltd., vol. 24(2), pages 253-274.
    8. Nooteboom, B. & Berger, H. & Noorderhaven, N.G., 1997. "Effects of trust and governance on relational risk," Open Access publications from Tilburg University urn:nbn:nl:ui:12-73834, Tilburg University.
    9. Standifird, Stephen S. & Marshall, R. Scott, 2000. "The transaction cost advantage of guanxi-based business practices," Journal of World Business, Elsevier, vol. 35(1), pages 21-42, April.
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