The value of guanxi for small vegetable farmers in China

Abstract

PurposeFollowing 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/approachFieldwork 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.FindingsThe 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 implicationsGuanxi 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/valueQuantitative evaluation of the effects of the Chinese cultural embedded concept of guanxi in the Chinese agrifood sector fills in an important research gap.