Integrating subsistence producers from developing and emerging countries with the world market: the roles of Reactive and Proactive market orientation

Abstract

Integrating subsistence producers from developing and emerging countries with the world market is seen as a way out poverty. Market integration analyses have been predominately the domain of economists who generally indicate that only socioeconomic and institutional factors such as cost of doing business and trade liberalizations exert influence on subsistence producers integration with markets. The extant literature has however overlooked the role of market orientation (MO) as a main driver of market integration of subsistence producers. Based on three streams of literatures (market integration, MO and embeddedness literatures), this study develops a framework in which MO is on the one hand seen as an antecedent of market integration and on the other hand rooted in embeededness of transaction and social relationships. A distinction is made between reactive and proactive MO. The framework is tested on data obtained from a sample of 183 shrimp fishers from Benin using a structural equation modeling. The results show that not proactive but reactive MO is the main driver of export market integration. In turn export market leads to better livelihood performance of shrimp fishers. Results also show that both MO dimensions are embedded-dependent, with favor support to reactive MO.