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Structural embeddedness and contractual relationships of chain stores and their suppliers in Russian emerging markets

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  • Zoya Kotelnikova

    ()
    (National Research University – Higher School of Economics. Department of Sociology. Senior Lecturer; Laboratory for Studies in Economic Sociology.)

Abstract

The core idea of the paper is to put the social embeddedness of economic phenomena as a key concept in economic sociology at the heart of empirical research. The author stresses the importance of taking into account the temporal dimension of market exchange. It is shown that the continuation of exchange relationships can be considered as a proxy for social embeddedness. The paper focuses on the contractual relationships of retail chains and their suppliers, which have been dramatically changed since the emergence of modern chain stores in Russia. The aim is to reveal to what extent contractual relationships between retailers and suppliers are structurally embedded and which factors are conducive to a greater degree of structural embeddedness of retailer-supplier relationships in emerging Russian markets. Based on Baker, Faulkner, and Fisher’s theory of the continuation of markets ties, the presented paper focuses on the influence of power, institutional forces, and competition. The paper is based on a survey of retailers and their suppliers in five Russian cities: Moscow, St. Petersburg, Yekaterinburg, Novosibirsk, and Tyumen. In 2010 questionnaires were collected from 257 managers of supplying companies and 255 retail managers from the above cities. Quantitative data was enriched with 30 in-depth interviews with suppliers and retailers in 2008. It is shown that both retailers and suppliers tend to maintain long-lasting relationships with a majority of partners. However, retailers and suppliers are prone to follow different models. Power turns out to be meaningful for retailers, while institutional forces appear to be of much more special importance for suppliers. Retailers exercise organizational power to destabilize market ties with counterparts. Suppliers use relational selection criteria and specific investments to attach relationships with exchange partners. The significant factors conducive to the prevalence of the embedded ties in the market are organizational power, relational criteria of business partner selection, specific investments, length of service in retailing, and the tenure length of managers in a given company, sector, and geographic location

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Bibliographic Info

Paper provided by National Research University Higher School of Economics in its series HSE Working papers with number WP BRP 22/SOC/2013.

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Length: 35 pages
Date of creation: 2013
Date of revision:
Publication status: Published in WP BRP Series: Sociology / SOC, July 2013, pages 1-35
Handle: RePEc:hig:wpaper:22/soc/2013

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Related research

Keywords: market exchange; structural embeddedness; contractual relationship; networks; duration of a relationship; power; institutions; competition; trade revolution; emerging markets.;

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  1. Andrey Shevchuk & Denis Strebkov, 2013. "Freelance contracting in the digital age: informality, virtuality and social ties," HSE Working papers WP BRP 12/SOC/2013, National Research University Higher School of Economics.
  2. Huber, Peter & Wörgötter, Andreas, 1998. "Political Survival or Entrepreneurial Development? Observations on Russian Business Networks," MPRA Paper 20412, University Library of Munich, Germany.
  3. Levinthal, D.A. & Fichman, M., 1991. "Honeymoons and the Liability of Adolescence : A New Perspective on Duration Dependence in Social Organizational Relationships," GSIA Working Papers 1991-34, Carnegie Mellon University, Tepper School of Business.
  4. Dennis W. Carlton, 1986. "The Rigidity of Prices," NBER Working Papers 1813, National Bureau of Economic Research, Inc.
  5. Vadim Radaev, 2013. "Where Does the Demand for Regulation Come From? The State’s Return to the Retail Trade in Russia," HSE Working papers WP BRP 02/SOC/2013, National Research University Higher School of Economics.
  6. Erin Anderson & Barton Weitz, 1989. "Determinants of Continuity in Conventional Industrial Channel Dyads," Marketing Science, INFORMS, vol. 8(4), pages 310-323.
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