Investigation of the Impact of Location, Social Capital and Human Capital Theories on the Continuity of Agribusiness Corporations (Case Study: Khezri Agribusiness Corporation in Qaen Township)

مجله اقتصاد و توسعه کشاورزی

Article 2, Volume 35, Issue 1 - Serial Number 51, April 2021, Pages 15-30   

Document Type: Research Article

DOI: 10.22067/jead.2021.17786.0

Authors

M. Davari Torshizi; M. Ghorbani^* ; M. Daneshvar Kakhki

Department of Agricultural Economics, Faculty of Agricultural , Ferdowsi University of Mashhad, Mashhad,Iran

Abstract

Introduction: Almost all rural communities in Iran are exclusively engaged with agriculture, therefore farming remains the largest source of income for them. Agriculture can be a major driver of growth for the Iranian economy. Therefore, increasing factor productivity in the agricultural sector is essential and by growing population rate, the need to invent more productive systems is highlighted. In this regards, smallholder agriculture, which is marked by low productivity should be transformed into agribusiness corporations which could foster the income and productivity of enterprises. Regarding the effective role of agribusiness corporations in enhancing agricultural productivity, and providing livelihoods and employment in rural communities, this study aimed at investigating the impact of location decision, social and human capital factors on the longevity of an agribusiness corporation called Khezri Agribusiness Corporation located in Khezri Township from Sothern Khorasan province. The reason for choosing Khezri Corporation as the case study was that according to surveys, this corporation has been one of the most successful agricultural associations for many years and has been able to create job opportunities to stop migration towards big cities. To the best of our knowledge, this paper is the first attempt to expendably investigate the factors affecting the continuity of an agribusiness corporation in Iran.
Materials and Methods: In order to achieve the objectives of the research, a well-structured questionnaire has been designed according to the literature review and using the opinions of university professors and experts of Khezri Agricultural Corporation. In this study, location factors, social capital and human capital are three main structures that are assessed by providing the information extracted from the questionnaire, and then, the impact of each structure on the continuity of the corporation's activity has been investigated based on indexing method. Each of the structures consists of different dimensions, and each dimension is measured by a number of items or questions using a Likert spectrum. Simple random sampling procedure was used to obtain the size of sample. At the end, the sample size was estimated at 45. Applying a systematic random sampling technique, the respondents were selected and the final questionnaire was distributed among them. At the primary analysis, 15 questionnaires were excluded from the analysis due to the large size of missing information. A total of 30 questionnaires were selected for further analysis. It is worth noting that in most cases, the questionnaires were tried to be completed in the form of interviews to increase the accuracy of the work.
Results and Discussion: Study findings suggest that location, social and human capital factors are at a high level of importance in the studied corporation. From the viewpoint of respondents, social capital had the greatest impact on the longevity of the corporation, followed by location and human capital. Furthermore, the communication dimension in social capital, the infrastructure factors in the location decision and the non-cognitive abilities in the human capital have been identified as the most influential components on the longevity of Khezri Agricultural Company's activities. Among the infrastructural factors, the criterion of "existence of basic resources" such as water wells, aqueducts, qanats, underground aquifers, etc. is the most effective criterion. According to 93.3% of respondents, this factor has a moderate to high impact on the corporation's location.
Conclusion: We recommend effective communication and planning in improvement of communication between organizational units and communication between managers and employees needs to be strengthened. Internalization of the organization's vision, mission, and goals, implementing a goal-based management plan, and applying the suggestion system in the organization and investing in formal and organized training are recommended as well to sustain the agribusiness corporations. It must be noted that given that the findings of this study are largely in line with the research background, its recommendations are expected to be applicable to the other agricultural business corporations in Iran. In addition, as we formerly discussed in the introduction of this paper,despite the benefits of agricultural corporations, few of these companies are currently active in the country. Therefore, analysis of factors affecting farmers’ decision to be involved in establishing agribusiness corporations should be the subject of future research.

Keywords

Agribusiness; Longevity of Activity; Location Decision; Social Capital; Human Capital; South Khorasan province

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