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The moderating effect of market knowledge on contractual efficacy: evidence from Asian supplier–Western buyer relationships

Author

Listed:
  • Umar Burki

    (History and Social Sciences, University of South-Eastern Norway
    Oslo New University College)

  • Richard Glavee-Geo

    (NTNU-Norwegian University of Science and Technology)

  • Robert Dahlstrom

    (Miami University
    Department of Marketing, BI-Norwegian Business School)

  • Renger Kanani

    (University of Dar es salaam Business School)

  • Arnt Buvik

    (Molde University College (Specialized University in Logistics))

Abstract

This study employs transaction cost logic to investigate effects of market knowledge on formal contracting. The model maintains that market knowledge moderates the effects of supplier specific assets and buyer specific assets on contracting in international buyer–seller relationships. We collected survey data from 131 international buyer–supplier relationships and applied regression analysis to test the hypotheses. The data suggest that the need for formal contracts diminishes when substantial supplier specific assets accompany high market knowledge. In contrast, the need for formal contracting increases when substantial buyer specific assets are combined with high market knowledge. This study provides new insights for B2B marketing literature by shedding light on the influence of market knowledge on formal contracts. The discussion addresses the study’s implications for interorganizational theory and practice.

Suggested Citation

  • Umar Burki & Richard Glavee-Geo & Robert Dahlstrom & Renger Kanani & Arnt Buvik, 2023. "The moderating effect of market knowledge on contractual efficacy: evidence from Asian supplier–Western buyer relationships," Asian Business & Management, Palgrave Macmillan, vol. 22(4), pages 1454-1484, September.
    • Handle: RePEc:pal:abaman:v:22:y:2023:i:4:d:10.1057_s41291-022-00214-1
    DOI: 10.1057/s41291-022-00214-1
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    References listed on IDEAS

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