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Table 3 Research hypotheses investigating the effects of producer-processor relationship characteristics on relational governance and firm economic performance

From: A structural equation modeling analysis of relational governance and economic performance in agri-food supply chains: evidence from the dairy sheep industry in Sardinia (Italy)

HP code Exogenous variable   Endogenous variable HP description
H3.1 Governance
(+)
Milk price More formal types of governance are associated with better economic performance of farms, i.e., higher milk prices
H3.2.1 Firm size
(+)
Governance Larger farms are more likely to adopt more formal types of governance in their relation with processors
H3.2.2 Firm size
(+)
Milk price Larger farms are more likely to obtain higher prices for their milk
H3.3.1 Trust
(−)
Governance Breeders that trust their commercial partners are more likely to adopt less formal types of governance in their relation with processors
H3.3.2 Trust
(+)
Milk price Breeders that trust their commercial partners are more likely to obtain higher prices for their milk
H3.3.3 Trust
(+)
Firm size Breeders that trust their commercial partners are more likely to run larger farms
H2.4.1 Uncertainty
(+)
Governance The higher the uncertainty perceived by farmers, the more they are likely to adopt more formal types of governance in their relationships with processors
H2.4.2 Uncertainty
(−)
Milk price The higher the uncertainty perceived by farmers, the more they are likely to obtain lower milk prices
H2.4.3 Uncertainty
(−)
Firm size The higher the uncertainty perceived by farmers, the more they are likely to run smaller farms
H2.5.1 Investment
(+)
Governance Breeders who made investments to meet the needs of their commercial partners are more likely to adopt more formal types of governance in their relation with processors
H2.5.2 Investment
(+)
Milk price Breeders who made investments to meet the needs of their commercial partners are more likely to obtain higher prices
H2.5.3 Investment
(+)
Firm size Breeders who made investments to meet the needs of their commercial partners are more likely to run larger farms