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The value of guanxi for small vegetable farmers in China

Lu, Hualiang, Trienekens, Jacques H., Omta, S.W.F., Feng, Shuyi
British food journal 2008 v.110 no.4-5 pp. 412-419
farmers, small-scale farming, vegetable crops, vegetables, interpersonal relationships, human food chain, food marketing, farm surveys, social environment, social networks, China
Purpose -- Following a guanxi value -- buyer-seller relationship quality -- marketing behaviour scheme, this paper aims to explore how traditional guanxi supports small vegetable farmers in modern markets in China. Design/methodology/approach -- Fieldwork was performed in Jiangsu Province, PR China. A stratified random sample of 167 vegetable farmers provided data for empirical testing with partial least squares analysis. Findings -- The findings suggested that the value of guanxi networks is an antecedent to buyer-seller relationship quality and marketing behaviour in China. Guanxi networks improve the quality of buyer-seller relationships in terms of interpersonal trust and satisfaction. Buyer-seller relationships influence smallholders' transaction relationships, their participation in modern markets and choice for formal contracts. Guanxi networks not only support Chinese small-scale vegetable farmers to get access to modern high-value markets (e.g. supermarkets and international markets), but also encourage informal transactions in the vegetable business. Practical implications -- Guanxi networks play a critical role in the modern marketing environment in China. Marketing strategies based on personal relationships should be further enhanced in order to increase participation of smallholders in modern markets. Originality/value -- Quantitative evaluation of the effects of the Chinese cultural embedded concept of guanxi in the Chinese agrifood sector fills in an important research gap.