PR – Behavioural Factors Affecting The Adoption Of Forward Contracts By Australian Wool Producers
A behavioural theory, based on the Theory of Planned Behaviour and Diffusion of Innovations, was previously developed to understand wool producers’ intentions to adopt the use of forward contracts. The purpose of this research is to test the reliability and validity of our model using structural equation modelling. Empirical results indicate that the most significant variables in the model related to the nature of the Australian wool industry and a range of variables internal to the farm business. Relative advantage, compatibility and risk were also highly significant variables. The single message from this research is that there are a number of behavioural characteristics accounting for the slow adoption of price risk management strategies that are available to stabilise income. These findings will be useful to those wool traders and researchers looking to strengthen the international wool supply chain by using forward contracts to improve knowledge of wool qualities and quantities.
Keywords: Structural equation modelling, PLS, wool, relative advantage, compatibility, risk.