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Technological Uncertainty, Buyer Preferences and Supplier Assurances: An Examination of Pacific Rim Purchasing Arrangements

Author

Listed:
  • Kirti Sawhney Celly

    (University of California—Irvine)

  • Robert E Spekman

    (University of Virginia)

  • John W Kamauff

    (Price Waterhouse Coopers Consulting)

Abstract

We use the metaphor of the mutual assurance game to develop the notion that overseas suppliers may proactively manage uncertainty by making customized investments to serve their buyers. Using this game-theoretic conceptualization as a complement to the transactions cost analysis notion of credible commitments, we argue that such investments serve as assurances of commitment to the international buyer. The hypotheses are tested using data collected in a survey of U.S. purchasing managers regarding their relationships with their Pacific Rim suppliers. Consistent with our hypotheses, our primary results indicate that suppliers' relationship-specific investments are greater when technological uncertainty is high and buyers value supplier responsiveness. Further, our results suggest that relationship stability and buyer information sharing are greater when supplier relationship-specific investments are greater. These results provide some support for our argument that in the face of technological uncertainty, overseas suppliers may unilaterally commit to their buyers in attempts to obtain reciprocal benefits that help them manage external uncertainty.© 1999 JIBS. Journal of International Business Studies (1999) 30, 297–316

Suggested Citation

  • Kirti Sawhney Celly & Robert E Spekman & John W Kamauff, 1999. "Technological Uncertainty, Buyer Preferences and Supplier Assurances: An Examination of Pacific Rim Purchasing Arrangements," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(2), pages 297-316, June.
    • Handle: RePEc:pal:jintbs:v:30:y:1999:i:2:p:297-316
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    Cited by:

    1. Aykol, Bilge & Leonidou, Leonidas C., 2018. "Exporter-importer business relationships: Past empirical research and future directions," International Business Review, Elsevier, vol. 27(5), pages 1007-1021.
    2. Kang, Min-Ping & Mahoney, Joseph T. & Tan, Danchi, 2007. "Why Firms Make Unilateral Investments Specific to Other Firms: The Case of OEM Suppliers," Working Papers 07-0110, University of Illinois at Urbana-Champaign, College of Business.
    3. Ruey-Jer ‘Bryan’ Jean & Rudolf R. Sinkovics & Stefan Zagelmeyer, 2018. "Antecedents and Innovation Performance Implications of MNC Political Ties in the Chinese Automotive Supply Chain," Management International Review, Springer, vol. 58(6), pages 995-1026, December.
    4. Roth, Martin S. & Money, R. Bruce & Madden, Thomas J., 2004. "Purchasing processes and characteristics of industrial service buyers in the U.S. and Japan," Journal of World Business, Elsevier, vol. 39(2), pages 183-198, May.
    5. Mohamed M. Mostafa, 2023. "A one-hundred-year structural topic modeling analysis of the knowledge structure of international management research," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(4), pages 3905-3935, August.
    6. Sally Weller, 2006. "The Embeddedness of Global Production Networks: The Impact of Crisis in Fiji's Garment Export Sector," Environment and Planning A, , vol. 38(7), pages 1249-1267, July.
    7. Francis, John & Mukherji, Ananda & Mukherji, Jyotsna, 2009. "Examining relational and resource influences on the performance of border region SMEs," International Business Review, Elsevier, vol. 18(4), pages 331-343, August.
    8. Tsu-Ming Yeh & Fan-Yun Pai & Liang-Chuan Wu, 2020. "Relationship Stability and Supply Chain Performance for SMEs: From Internal, Supplier, and Customer Integration Perspectives," Mathematics, MDPI, vol. 8(11), pages 1-18, October.
    9. Jonsson, Sara & Lindbergh, Jessica, 2010. "The impact of institutional impediments and information and knowledge exchange on SMEs' investments in international business relationships," International Business Review, Elsevier, vol. 19(6), pages 548-561, December.
    10. Jean, Ruey-Jer Bryan & Kim, Daekwan & Chiou, Jyh-She & Calantone, Roger, 2018. "Strategic orientations, joint learning, and innovation generation in international customer-supplier relationships," International Business Review, Elsevier, vol. 27(4), pages 838-851.
    11. Chang, Kuo-Hsiung & Gotcher, Donald F., 2007. "Safeguarding investments and creation of transaction value in asymmetric international subcontracting relationships: The role of relationship learning and relational capital," Journal of World Business, Elsevier, vol. 42(4), pages 477-488, December.
    12. Ravi Kashyap, 2022. "Options as Silver Bullets: Valuation of Term Loans, Inventory Management, Emissions Trading and Insurance Risk Mitigation using Option Theory," Annals of Operations Research, Springer, vol. 315(2), pages 1175-1215, August.
    13. Ruey-Jer Bryan Jean & Rudolf R. Sinkovics & Daekwan Kim, 2017. "Antecedents and Outcomes of Supplier Innovativeness in International Customer–Supplier Relationships: The Role of Knowledge Distance," Management International Review, Springer, vol. 57(1), pages 121-151, February.
    14. Jean, Ruey Jer Bryan & Kim, Daekwan & Choi, Kyuyeong, 2021. "Pattern of information technology use and relationship learning in international customer-supplier relationships," International Business Review, Elsevier, vol. 30(4).
    15. Patrizia Casadei & Simona Iammarino, 2021. "Trade policy shocks in the UK textile and apparel value chain: Firm perceptions of Brexit uncertainty," Journal of International Business Policy, Palgrave Macmillan, vol. 4(2), pages 262-285, June.

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