Choice and performance of governance mechanisms: Matching contractual and relational governance to sources of asset specificity
We argue that the optimal configuration of contractual and relational governance mechanisms in an alliance is contingent not only on the amount of asset specificity, but on the nature of the asset involved in the alliance. Physical assets are more suited to contractual controls, while knowledge assets will be best suited to the use of relational governance mechanisms. Using data on alliances in the German telecommunications industry, we find that the choice of governance mechanisms is as hypothesized. In addition, relational and contractual governance mechanisms are perceived to perform better in the presence of knowledge and physical assets, respectively. Relational governance mechanisms improve overall alliance performance to the degree that knowledge assets are involved, but impair performance when property assets are involved. Our findings contribute to the literature on alliances, as well as the underlying literatures of transaction cost economics, the literature on relational governance, and recent work studying their interaction.
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpio:0411008. 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: (EconWPA)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.