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Determinants of Perceived Interfirm Dependence in Industrial Supplier Relations

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  • Niels Noorderhaven
  • Bart Nooteboom
  • Hans Berger

Abstract

Studies of industrial buyer-supplier relations mostly focus on structural characteristics of the transactions between parties, and assume a direct relation between these factors and characteristics of the relationships. This paper focuses on the psychological dimension of transaction relations, reflected in perceptions of dependence, from the perspective of an industrial supplier. In the first step of the analysis, three groups of structural determinants of perceived supplier dependence are explored: factors related to goal mediation, factors related to relation-specific assets, and factors related to network embeddedness. After that, the influence of these structural factors and of perceived supplier dependence on the ordering of buyer-supplier relations is investigated. Data come from a study of the micro-electronics assembly industry in the Netherlands. The findings show that sales to a particular buyer as a percentage of the total sales of the supplier and the growth of sales to a particular buyer (two forms of goal mediation) are important determinants of perceived supplier dependence. Human asset specificity is also related to perceived supplier dependence. Network embeddedness variables play only a minor role in explaining perceived supplier and buyer dependence in this study. The data further show that perceived dependence has an effect on the degree of ordering in the relationship, next to structural factors like the extendedness of the relationship beyond the focal transaction and physical asset specificity. The effects of human asset specificity and dedicated assets on ordering are contrary to what was expected on the basis of the literature. Copyright Kluwer Academic Publishers 1998

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  • Niels Noorderhaven & Bart Nooteboom & Hans Berger, 1998. "Determinants of Perceived Interfirm Dependence in Industrial Supplier Relations," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 2(3), pages 213-232, September.
    • Handle: RePEc:kap:jmgtgv:v:2:y:1998:i:3:p:213-232
    DOI: 10.1023/A:1009962926611
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    References listed on IDEAS

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    1. Imrie, R & Morris, J, 1992. "A review of recent changes in buyer-supplier relations," Omega, Elsevier, vol. 20(5-6), pages 641-652.
    2. Joskow, Paul L, 1985. "Vertical Integration and Long-term Contracts: The Case of Coal-burning Electric Generating Plants," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 1(1), pages 33-80, Spring.
    3. Joskow, Paul L, 1988. "Asset Specificity and the Structure of Vertical Relationships: Empirical Evidence," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 4(1), pages 95-117, Spring.
    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. Nooteboom, B. & Berger, H. & Noorderhaven, N.G., 1997. "Effects of trust and governance on relational risk," Other publications TiSEM 8e83932e-064c-40e8-afe7-4, Tilburg University, School of Economics and Management.
    6. Noorderhaven, N.G., 1996. "How to make transaction cost economics more balanced and realistic," Other publications TiSEM 5defaade-4563-4df5-84d4-e, Tilburg University, School of Economics and Management.
    7. Noorderhaven, N.G., 1994. "Transaction cost analysis and the explanation of hybrid vertical inter-firm relations," Other publications TiSEM 7ae86fa0-2ab6-4f37-97f5-4, Tilburg University, School of Economics and Management.
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    Cited by:

    1. de Jong, G. & Nooteboom, B., 2001. "The Causality of Supply Relationships," ERIM Report Series Research in Management ERS-2001-73-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    2. Sanner, Leif, 2005. "Dependence and trust between suppliers and industrial customers," Working Papers 2005:6, Örebro University, School of Business.
    3. Andersen, Poul Houman & Christensen, Poul Rind, 2005. "Bridges over troubled water: suppliers as connective nodes in global supply networks," Journal of Business Research, Elsevier, vol. 58(9), pages 1261-1273, September.

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