Inter-firm co-ordination: international versus domestic buyer-seller relationships
The use of transaction cost analysis (TCA) to study the choice of governance mode in foreign countries has been a source of considerable research. Empirical tests of the TCA predictions within a single governance mode are, however, limited. Building on transaction costs arguments, and related work in international marketing literature, we examine the association between asset specificity and inter-firm co-ordination in domestic and international buyer-seller relationships. The extant literature is extended by also comparing the impact of environmental uncertainty on inter-firm co-ordination across domestic and international relationships. Empirical findings from a survey of 164 industrial buyers demonstrate that there is a positive association between asset specificity and inter-firm co-ordination, and further that this association is stronger in international relationships than in domestic business-to-business trade. Furthermore, the results indicate that environmental uncertainty is stronger related to inter-firm co-ordination in international buyer-seller relationships compared to domestic buyer-seller relationships.
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Volume (Year): 29 (2001)
Issue (Month): 2 (April)
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