The Decision-Making and Moderator Effects of Transaction Costs, Service Satisfaction, and the Stability of Agricultural Productive Service Contracts: Evidence from Farmers in Northeast China

Ying Xue, Hongbin Liu (), Zhenzhen Chai and Zimo Wang
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Ying Xue: College of Land and Environment, Shenyang Agricultural University, Shenyang 110866, China
Hongbin Liu: College of Land and Environment, Shenyang Agricultural University, Shenyang 110866, China
Zhenzhen Chai: College of Economics and Management, Shenyang Agricultural University, Shenyang 110866, China
Zimo Wang: College of Engineering, Shenyang Agricultural University, Shenyang 110866, China

Sustainability, 2024, vol. 16, issue 11, 1-21

Abstract: Agricultural producer service (APS) plays a crucial role in the sustainable development of modern agriculture. Enhancing the stability of contracts between farmers and APS is the key to promoting the high-quality development of the latter. This research aimed to explore the decision-making and moderator effects of transaction costs, service satisfaction, and the stability of APS contracts by constructing a theoretical framework. Based on survey data from 893 farmers in Northeast China’s black soil area, we employed the Mvprobit model to examine the relationship between transaction costs, service satisfaction, and contract stability. The key findings are as follows: Firstly, transaction costs have a dual impact on contract stability in agricultural productive services, acting as both inhibitors and promoters. Higher information and execution costs reduce farmers’ willingness to maintain current cooperative relationships, while higher negotiation costs make farmers more inclined to stick with the status quo. Secondly, farmers’ satisfaction with services positively moderates the influence of transaction costs on contract stability, with highly satisfied farmers being more affected than those with lower satisfaction levels. Lastly, farmers’ personal, family, and social characteristics all shape their preferences during the formation process. To mitigate cooperation risks and bolster cooperation contract stability, this study suggests that the government implement supervision and incentives to reduce transaction costs for farmers when procuring services and enhance the efficiency of farmer–service provider connections.

Keywords: farmers; transaction costs; service satisfaction; APS; contract stability; the sustainable development of modern agriculture (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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