Relational ties or customized contracts? An examination of alternative governance choices in China
AbstractAs business transactions become more complex in China – an increasingly market-driven economy – are managers more likely to employ relational ties or contracts? Consistent with the view that personal institutions govern transactions in China, our analysis of 361 buyer–supplier exchanges indicates that managers rely more on relational ties as asset specificity and uncertainty increase. We also find some support that impersonal institutions govern market transactions: as uncertainty increases, managers craft more customized contracts. Surprisingly, there is no association between contracts and asset specificity. These results hold for both local and foreign firms. Journal of International Business Studies (2008) 39, 526–534. doi:10.1057/palgrave.jibs.8400363
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Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Journal of International Business Studies.
Volume (Year): 39 (2008)
Issue (Month): 3 (April)
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Web page: http://www.palgrave-journals.com/
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- Han, Jiqin & Trienekens, Jacques H. & (Onno) Omta, S.W.F., 2011. "Relationship and quality management in the Chinese pork supply chain," International Journal of Production Economics, Elsevier, vol. 134(2), pages 312-321, December.
- Ju, Min & Murray, Janet Y. & Kotabe, Masaaki & Gao, Gerald Yong, 2011. "Reducing distributor opportunism in the export market: Effects of monitoring mechanisms, norm-based information exchange, and market orientation," Journal of World Business, Elsevier, vol. 46(4), pages 487-496, October.
- Berulava, George, 2013. "Do Trust-Based Relations Improve Firm’s Performance? Evidence from Transition Economies," MPRA Paper 48430, University Library of Munich, Germany.
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