Competition and trust: Evidence from German car manufacturers

Leonardo Felli, Johannes Koenen () and Konrad O. Stahl

No 11-072, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We explore the determinants and effects of trust relationships between upstream suppliers and downstream producers. Using unique survey data on individual supplier-buyer relationships in the German automotive industry, we show, by means of different measures of supplier-buyer trust, that higher levels of trust mitigate relationship-specific underinvestment in a classical hold-up situation. Moreover, contrary to the extant literature, we show that higher levels of supplier's trust are reflected in the buyer's choice of a more competitive procurement strategy among potential suppliers.

Keywords: trust; hold-up problem; competition; specific investment; suppliers; car manufacturers; German automotive industry (search for similar items in EconPapers)
JEL-codes: D22 D86 L22 L62 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-bec and nep-com
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/54972/1/684257246.pdf (application/pdf)

Related works:
Working Paper: Competition and Trust: Evidence from German Car Manufacturers (2011)
Working Paper: Competition and Trust: Evidence from German Car Manufacturers (2011)
Working Paper: Competition and Trust: Evidence from German Car Manufacturers (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:11072

Access Statistics for this paper

More papers in ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().