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

Lu Hualiang, S. Feng, J.H. Trienekens, S.W.F. Omta

Research output: Contribution to journalArticleAcademicpeer-review

7 Citations (Scopus)

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.
Original languageEnglish
Pages (from-to)363-378
JournalChina Agricultural Economic Review
Volume4
Issue number3
DOIs
Publication statusPublished - 2012

Keywords

  • buyer-seller relationships
  • supplier relationships
  • social-structure
  • moderating role
  • channel
  • guanxi
  • cost
  • performance
  • governance
  • exchange

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