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Exploring determinants of perceived interfirm dependence in industrial supplier relations


Author Info

  • Noorderhaven, N.G.
  • Nooteboom, B.
  • Berger, H.

    (Tilburg University, Center for Economic Research)


Three groups of sources of supplier dependence are discussed in the literature: factors related to goal mediation, factors related to relation-specific assets, and factors related to network embeddedness. This paper explores the influence on the dependence of ego and alter, as perceived by the supplier, of factors representative for all three groups of sources of dependence, using data from two separate empirical studies. The findings suggest that sales to a particular buyer as a percentage of total the sales of the supplier (a form of goal mediation) are a very important determinant of perceived supplier dependence. Various forms of asset specificity at the side of the supplier are also related to perceived supplier dependence, in particular human asset specificity. In one of the studies physical asset specificity was found to be negatively associated with supplier dependence, a finding which is strongly counter-intuitive. Buyer dependence, as perceived by the supplier, is related to the extendedness of the relationship (goal mediation) and, counter-intuitively, to dedicated assets at the side of the supplier. The network embeddedness variables play only a minor role in explaining perceived supplier and buyer dependence in this study. The data from the two studies furthermore suggest that perceived supplier dependence and perceived buyer dependence are caused by different factors, and that perceived buyer dependence does not compensate for high perceived supplier dependence.

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Bibliographic Info

Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 1995-115.

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Date of creation: 1995
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Handle: RePEc:dgr:kubcen:1995115

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Keywords: Buyer Supplier Relations; microeconomics;


References listed on IDEAS
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  1. Joskow, Paul L, 1988. "Asset Specificity and the Structure of Vertical Relationships: Empirical Evidence," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(1), pages 95-117, Spring.
  2. Noorderhaven, N.G., 1994. "Transaction cost analysis and the explanation of hybrid vertical inter-firm relations," Open Access publications from Tilburg University urn:nbn:nl:ui:12-289388, Tilburg University.
  3. Clifton, James A., 1995. "Dynamics of the Firm: Strategies of Pricing and Organization : John Groenewegen, ed., (Edward Elgar Publishing Ltd, Cambridge, 1993) pp. xiii + 171, $59.95," Journal of Economic Behavior & Organization, Elsevier, vol. 27(3), pages 492-497, August.
  4. Noorderhaven, Niels G., 1995. "Transaction, interaction, institutionalization: Toward a dynamic theory of hybrid governance," Scandinavian Journal of Management, Elsevier, vol. 11(1), pages 43-55, March.
  5. Asanuma, Banri, 1989. "Manufacturer-supplier relationships in Japan and the concept of relation-specific skill," Journal of the Japanese and International Economies, Elsevier, vol. 3(1), pages 1-30, March.
  6. Lyons, Bruce R & Bailey, Susan, 1993. " Small Subcontractors in UK Engineering: Competitiveness, Dependence and Problems," Small Business Economics, Springer, vol. 5(2), pages 101-09, June.
  7. Paul Joskow, 1984. "Vertical Integration and Long Term Contracts: The Case of Coal Burning Electric Generating Plants," Working papers 361, Massachusetts Institute of Technology (MIT), Department of Economics.
  8. Johanson, Jan & Mattsson, Lars-Gunnar, 1987. "Interorganizational relations in industrial systems : a network approach compared with the transaction cost approach," Working Papers 1987:7, Uppsala University, Department of Business Studies.
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