The effect of asset specificity on apple growers’ willingness to scaled operation: An analysis based on moderated mediation effects

Abstract

[Objective] Agricultural management on a large scale is an important way to promote the modernization of agriculture. Under the national condition that agricultural production is dominated by small-scale farmers, their willingness to scaled operation is the fundamental prerequisite for the realization of large-scale agricultural production and agricultural modernization. The purpose of this study was to analyze the key factors that influence apple growers’ willingness to scaled operation and its formation mechanism from the perspective of asset specificity, considering the operation characteristics of perennial apple crops. [Methods] Based on the micro-survey data of 1069 apple growers in Shandong and Shaanxi Provinces, an ordered logit model and a moderated mediation model were used to empirically test the impact of asset specificity on farmers’ willingness to scaled operation, and the mediation role of risk preference and the moderating role of climate change perception in the mediation role of risk preference. [Results] (1) Farmers’ willingness to manage apple production on a large scale was weak, and only 12.20% of the sample farmers were willing to expand their scale of operation. (2) High asset specificity significantly promoted farmers’ willingness to scaled operation, mainly through land asset specificity, geographic location specificity, and physical asset specificity, and the former two played a greater role, while human capital specificity inhibited farmers’ willingness to scaled operation. (3) Risk preference played a positive mediation role in the relationship between asset specificity and farmers’ willingness to scaled operation, that is, high asset specificity enhanced farmers’ willingness to scaled operation by increasing their aversion to the risk of loss. (4) Climate change perception had a moderating effect on the mediation role of risk preference, that is, with the improvement of farmers’ climate change perception level, high asset specificity was easier to induce farmers’ willingness to scaled operation by enhancing farmers’ loss risk aversion. [Conclusion] It is necessary to encourage farmers with high asset specificity to scaled operation. By establishing and improving agricultural insurance, agricultural product futures market, and related supporting policies, the formal risk avoidance mechanism in agriculture can be improved. The location advantages of crop eugenic areas can be strengthened through promoting the accumulation of farmers’ agricultural specific assets in such areas.

Keywords

• |asset specificity|willingness to scaled operation|risk preference|climate change perception|apple growers|moderated mediation model