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

Network strength, transaction‐specific investments, inter‐personal trust, and relationship... 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png China Agricultural Economic Review Emerald Publishing

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

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Publisher
Emerald Publishing
Copyright
Copyright © 2012 Emerald Group Publishing Limited. All rights reserved.
ISSN
1756-137X
DOI
10.1108/17561371211263374
Publisher site
See Article on Publisher Site

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.

Journal

China Agricultural Economic ReviewEmerald Publishing

Published: Aug 31, 2012

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

References