Study on the governance mechanism of rural e-commerce service centers in rural China: agency problems and solutions
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Agency problems, such as moral hazard and adverse selection, are prevalent in the public service sector, and the Chinese rural e-commerce service sector is no exception. With the focus on the top-down project ‘information and communication technology for development’ implemented in the underdeveloped areas in China, the rural e-commerce service center (RESC) operation mechanism was analyzed in this study. Based on the tension between RESC operators, local governments, and e-commerce service providers that was reported in a field survey, this study further employs the principal-agent framework to analyze the problems of asymmetric information. Based on this analysis, solutions are suggested that can remedy the moral hazard issues in rural e-commerce service delivery, including developing a service evaluation system, promoting the usage of ICTs, and enhancing rural social capital. To address the problem of adverse selection, the RESC recruitment process should be improved. Moreover, by dividing the potential RESC employees into native villagers and e-commerce entrepreneurs, the optimal subsidy schemes can be designed for both types of applicants according to their ability and sensitivity to incentive.
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Study on the governance mechanism of rural e-commerce service centers in rural China: agency problems and solutions
In: International Food and Agribusiness Management ReviewSearch for other papers by Yi Cai in
Current site
Google Scholar
PubMed
Search for other papers by Deqiang Wang in
Current site
Google Scholar
PubMed
Search for other papers by Chunping Xia in
Current site
Google Scholar
PubMed
Search for other papers by Cuicui Wang in
Current site
Google Scholar
PubMed
Agency problems, such as moral hazard and adverse selection, are prevalent in the public service sector, and the Chinese rural e-commerce service sector is no exception. With the focus on the top-down project ‘information and communication technology for development’ implemented in the underdeveloped areas in China, the rural e-commerce service center (RESC) operation mechanism was analyzed in this study. Based on the tension between RESC operators, local governments, and e-commerce service providers that was reported in a field survey, this study further employs the principal-agent framework to analyze the problems of asymmetric information. Based on this analysis, solutions are suggested that can remedy the moral hazard issues in rural e-commerce service delivery, including developing a service evaluation system, promoting the usage of ICTs, and enhancing rural social capital. To address the problem of adverse selection, the RESC recruitment process should be improved. Moreover, by dividing the potential RESC employees into native villagers and e-commerce entrepreneurs, the optimal subsidy schemes can be designed for both types of applicants according to their ability and sensitivity to incentive.
| All Time | Past 365 days | Past 30 Days | |
|---|---|---|---|
| Abstract Views | 0 | 0 | 0 |
| Full Text Views | 232 | 164 | 22 |
| PDF Views & Downloads | 111 | 54 | 5 |
