Dynamics of Firm–Supplier Relationships in a Less Developed Economy: Evidence from African Manufacturing Firms
In this paper, we study supplier–firm interactions to explain firms' outsourcing relationships. We show that in an imperfect information setup a firm learns about the quality of its suppliers through repeated interaction. As the firm determines the suppliers' quality with greater precision, it gives a greater proportion of its contracts to these “better” suppliers. We report evidence from African manufacturing firms that is consistent with our hypothesis: both frequency and volume of transactions increase with the length of a firm's relationship with its supplier. These effects are stronger in poor contracting environments.
|Date of creation:||Feb 2004|
|Date of revision:||Apr 2005|
|Publication status:||Published in Southern Economic Journal, Vol. 72, No. 2|
|Contact details of provider:|| Postal: |
Web page: http://business.fau.edu/economics
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:fal:wpaper:04024. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vadym Volosovych)The email address of this maintainer does not seem to be valid anymore. Please ask Vadym Volosovych to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.