Information and communication technology impact on vegetable farmers’ transaction costs: Evidence from China

Abstract

This study empirically examined the impact of information and communication technology (ICT) on transaction costs in the sales stage from three dimensions of information costs, negotiation costs, and enforcing costs. The micro-sampling survey data was collected from 1338 vegetable growers in Hebei and Shandong provinces of China. We applied propensity score matching to examine the facts that adopting ICT can significantly decrease farmers’ information costs through improving information accuracy and reducing searching difficulty, and reducing negotiation costs by lowering the negotiation time. However, using ICT has no significant impact on default risk and transportation difficulty thus enforcing costs of farmers have a slight difference. Therefore, a coordinated set of policies including cultivating farmers’ ability to obtain information, advancing the construction of vegetable distribution channels and improving the market supervision mechanism are put forward.