Research On Impact Mechanism Of Channel Governance Mechanisms On Relationship Stability In Agricultural Channel

Currently, the cooperative model between farmers and agribusiness firms has beenthe mainstream in the agricultural industrialization in China. This model helps farmersenter the market smoothly by agribusiness firms, reduces transaction costs and improvesthe efficiency, it is also an effective way to resolve the problem of the coupling betweenthe “small farms” and “big market”. However, with the continuous development ofChina’s agricultural industrialization, there has been some problems, such as high leveldefault rate and unstable cooperative relationships. Some study has shown that thedefault rate of agricultural sales contract is up to80%in China.The high default rate of agricultural contract has caused widespread concern ofscholars, the scholars have conducted in-depth research, and obtained rich researchresults. But most of the studies are the application of new institutional economics, whilethe channel behavior has not received sufficient attention. Some studies have shown thatthe channel behaviors have significant impact on the efficiency of the relationshipsbetween channel members. For agribusiness firms, they may guide farmers to act thebehavior that the two sides are looking forward to by governing the channelrelationships, that will improve the relationship quality and enhance the relationshipstability. Therefore, this paper is based on the theories of the channel behavior and thechannel relationship, researching the impact mechanism of channel governancemechanisms on relationship stability in agricultural channel.Based on the review of relevant research and theories, this paper provides a modelof concepts. In this model, this paper analyzes the effects between authority governancemechanism and relationship stability in agricultural channel, norm governancemechanism and relationship stability, relationship quality and relationship stability, andalso analyzes the intermediary role of relationship quality. Based on the model, thispaper comes up with the hypothesis. We obtain first-hand data through distributingquestionnaires to the farmers who signed contracts with agribusiness firms, and then usethe method of regression analysis to testify the hypothesis. Finally, this paper points outsome constructive suggestion to improve the quality of the relationships betweenfarmers and agribusiness firms, and to enhance the relationship stability.The main conclusions of this paper include:(1) Authority governance mechanismhas an important influence on the stability of agricultural channel relationship. Usingthe coercive power enhances the farmers’ default tendency and reduces the farmers’ renewal will. Using non-coercive power reduces the farmers’ default tendency but hasno significant effects on the farmers’ renewal will.(2) Norm governance mechanism hasan important influence on the stability of agricultural channel relationship. Developingplans together and solving problems together reduce the farmers’ default tendency andenhance the farmers’ renewal will.(3) Relationship quality between farmers andagribusiness firms has an important influence on the stability of agricultural channelrelationship. Trust reduces the farmers’ default tendency and enhances the farmers’renewal will. Satisfaction enhances the farmers’ renewal will but has no significantlyeffects on the farmers’ default tendency.(4) Relationship quality plays an intermediaryrole in the relationships between channel governance mechanisms and the stability ofagricultural channel relationship.The innovation of this paper lies in two aspects:(1) Research perspective. It isfrom the perspective of cooperation between farmers and agribusiness firms that thispaper researches the impact mechanism of channel governance mechanisms onrelationship stability in agricultural channel. It is a new idea to improve the quality ofthe relationships between farmers and agribusiness firms, and to enhance therelationship stability. So there is a more innovation of theoretical significance in thispaper.(2) The relationship quality between farmers and agribusiness firms is introducedinto. Relationship quality is a very important factor that affects the stability of channelrelationships for a long time, but in agricultural channel theory it is not attractedsufficient attention. Therefore, this paper introduces relationship quality into the modelof concept, and it is another innovation in this paper.