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Contractual Arrangements of Traders in Chinese Wholesale Markets


  • Yu, Xiaohua
  • Abler, David G.
  • Zeng, Yinchu


Using a survey data of 700 traders, this study scrutinizes contract choices and enforcement for agricultural traders in China. This study finds that market service and environment are very important for both contract choices and enforcement. Better market service and environment can increase the propensity of using contract and the probability of contract enforcement both for purchase and sales of products. Education and memberships of special associations are also important for contract choices and enforcement. Higher education and affiliation to special associations for traders can increase the propensity of contracts and reduce contract breaches. However, the formats of contracts, whether contracts are oral or written, are not important for contract enforcement.

Suggested Citation

  • Yu, Xiaohua & Abler, David G. & Zeng, Yinchu, 2009. "Contractual Arrangements of Traders in Chinese Wholesale Markets," 2009 Conference, August 16-22, 2009, Beijing, China 51399, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae09:51399

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    References listed on IDEAS

    1. Fafchamps, Marcel & Gabre-Madhin, Eleni & Minten, Bart, 2005. "Increasing returns and market efficiency in agricultural trade," Journal of Development Economics, Elsevier, vol. 78(2), pages 406-442, December.
    2. Marcel Fafchamps & Bart Minten, 2001. "Social Capital and Agricultural Trade," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 680-685.
    3. Van de Ven, Wynand P. M. M. & Van Praag, Bernard M. S., 1981. "The demand for deductibles in private health insurance : A probit model with sample selection," Journal of Econometrics, Elsevier, vol. 17(2), pages 229-252, November.
    4. Beckmann, Volker & Boger, Silke, 2004. "Courts and contract enforcement in transition agriculture: theory and evidence from Poland," Agricultural Economics, Blackwell, vol. 31(2-3), pages 251-263, December.
    5. Yu, Xiaohua & Abler, David G. & Peng, Chao, 2008. "Dancing with the Dragon Heads: Enforcement, Innovations and Efficiency of Contracts between Agricultural Processors and Farmers in China," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6144, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Gabre-Madhin, Eleni Z., 2001. "The role of intermediaries in enhancing market efficiency in the Ethiopian grain market," Agricultural Economics, Blackwell, vol. 25(2-3), pages 311-320, September.
    7. Hamish R. Gow & Johan F. M. Swinnen, 2001. "Private Enforcement Capital and Contract Enforcement in Transition Economies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 686-690.
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    Cited by:

    1. Li, Zhigang & Yu, Xiaohua & Zeng, Yinchu & Holst, Rainer, 2012. "Estimating transport costs and trade barriers in China: Direct evidence from Chinese agricultural traders," China Economic Review, Elsevier, vol. 23(4), pages 1003-1010.
    2. Waldron, Scott & Brown, Colin & Longworth, John, 2010. "A critique of high-value supply chains as a means of modernising agriculture in China: The case of the beef industry," Food Policy, Elsevier, vol. 35(5), pages 479-487, October.

    More about this item


    Agricultural Contract; Trader; Wholesale Market; China; Agribusiness; Industrial Organization; International Development; Marketing; Risk and Uncertainty; L14; Q12; Q13;

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness


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