IDEAS home Printed from
   My bibliography  Save this paper

Transnational Business and Relational Contracting 2.0


  • Thomas Dietz

    () (University of Muenster - Institute of Political Science & ZenTra)


First, this article proposes that the rise of the Internet and further information- and communication technologies (ICT) has facilitated the evolution of a new, virtual form of relational contracts. This hypothesis is developed inductively by drawing on the results of an explorative empirical study about cross-border software development contracts. Although virtual social ties and networks do not promote the type of high-trust relations that are central to traditional relational contract theory, they reduce information asymmetries between transaction partners and facilitate the evolution of almost unrestricted virtual reputational networks. Relational contracts 2.0 emerge on the basis of ICT enabled transparency, controls and sanctioning tools. Second, the article discusses these results in the light of the wider theoretical debate about the institutional foundations of modern markets. Most importantly, it will be argued that modern ICT has significantly improved the economic performance of relational contracts. Relational contracts 2.0 are no longer restricted to small communities and long-term relationships, but are also able to allow exchange between unknown actors within competitive markets. Relational contracts 2.0 therefore do not oppose market expansions, but become mechanisms that actively promote such economic modernisation processes. The virtual society promotes the evolution of virtual relational contracts.

Suggested Citation

  • Thomas Dietz, 2015. "Transnational Business and Relational Contracting 2.0," ZenTra Working Papers in Transnational Studies 45 / 2015, ZenTra - Center for Transnational Studies.
  • Handle: RePEc:zen:wpaper:45

    Download full text from publisher

    File URL:
    File Function: Current version, 2015
    Download Restriction: no

    More about this item


    Contract Theory; Informal Norms; Relational Contract; Virtual Ties; Software-Industry;

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • B15 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Historical; Institutional; Evolutionary
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zen:wpaper:45. 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: (Finn Marten Koerner). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.