From Transaction Cost Containment to Relationship Commitment: An Integrative Perspective of Buyer-Supplier Relationship Governance

Khuram Shahzad
Additional contact information
Khuram Shahzad: University of Vaasa, Department of Production, Finland

from University of Primorska Press

Abstract: Based on transaction cost economics (TCE) and social exchange theory (SET), we investigate the significance of economic (i.e. contract completeness and symmetric dependence) and sociological (i.e. trust and communication) control mechanisms in minimizing transaction cost and enhancing relationship commitment in buyer-supplier relationship. The integrated research model is accessed using quantitative data from 170 buyer-supplier relationships established by Finnish SMEs. Structural equation modelling approach is utilized to analyse the data and results show that governance mechanisms have more effective role in minimizing transaction cost whereas sociological mechanisms enhance relationship commitment more effectively. Further, intriguing findings emerged regarding the interplay effects of economic and sociological governance mechanisms in relation with transaction cost and relationship commitment.

Keywords: transaction cost; relationship commitment; buyer-supplier relationships; governance mechanisms (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.hippocampus.si/ISBN/978-961-7023-71-8/21.pdf full text (application/pdf)

Related works:
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:prp:micp17:211-221

Access Statistics for this chapter

More chapters in MIC 2017: Managing the Global Economy; Proceedings of the Joint International Conference, Monastier di Treviso, Italy, 24–27 May 2017 from University of Primorska Press
Bibliographic data for series maintained by Alen Jezovnik ().