An Empirical Study on Governance Structure Choices in China´s Pork Supply Chain

Abstract

Chinas pork chain is changing in several ways. Specialized and commercial productions are gaining importance although small scale (backyard) pig production still dominates production. Similarly, small slaughterhouses continue transactions with pig producers in spot market rela- tionships, while big pork slaughtering and processing companies are actively exploring and ad- vancing different forms of integration. This study explains the governance structure choices in Chinas pork chain from both transaction cost economics and transaction value analysis perspec- tives using Structural Equation Modeling (SEM). It is revealed that governance choices in Chi- nas pork chain are the joint effect of transaction cost and collaborative advantages.