Guanxi Networks, Buyer-Seller Relationships, and Farmers' Participation in Modern Vegetable Markets in China

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

Journal of International Food & Agribusiness Marketing, Volume 22, Issue 1 & 2 January 2010 , pages 70 - 93

Abstract
The aim of this study is to investigate the joint effects of small-scale farmers' guanxi networks and buyer-seller relationships on their marketing behavior in China. A survey of 167 vegetable farmers shows that farmers' guanxi networks have significant effect on trusting relationship building with buyers and on their investment behavior for transactional specific assets. Guanxi networks also help to improve farmers' participation in modern high-value markets (e.g., supermarkets and international markets) and encourage relational transactions. Farmers' modern market participation will be further enhanced by trusting buyer-seller relationships with buyers and complying with buyers' quality requirements. The application of formal contracts, on the other hand, is closely related to farmers' trusting relationships with buyers and transactional specific assets for vegetable transactions. Some policy implications are discussed.

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