Reputation Flows: Contractual Disputes and the Channels for Inter-firm Communication
AbstractInter-firm information exchange with respect to the reliability of trade partners may be unmediated in the sense that it involves direct communication between the personnel of two firms. Alternatively, this information flow may be channeled by or through an organization such as a trade association. We assess the relationship between these two mechanisms for conveying reputational information. Based on evidence from five transition countries, we find that trade associations’ role as informational intermediaries in this regard is sensitive to the geographic relationship between a potential supplier (demander) of reputational information and the firm whose behavior may be reported (acquired). What is more, the use of trade associations as conduits for reputation flows seems to be more strategic than the use of unmediated communication in that it is highly sensitive to the effects of market structure.
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Bibliographic InfoPaper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 2003-633.
Length: 42 pages
Date of creation: 01 Nov 2003
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reputation; transition; trade associations;
Find related papers by JEL classification:
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- P3 - Economic Systems - - Socialist Institutions and Their Transitions
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