 The Role of Information and Opportunism in the Choice of Buyer‐Supplier RelationshipsStanley Baiman and Madhav V. Rajan Journal of Accounting Research, 2002, vol. 40, issue 2, 247-278 Abstract: An important characteristic of any buyer‐supplier relationship is the amount and type of information that is exchanged between the contracting parties. Buyer‐supplier networks are characterized by greater information exchange than arm’s‐length transactions. This enhanced information exchange allows for greater production efficiency but increases the potential for information misappropriation. In this paper we characterize the set of innovations for which each of these forms of exchange relationships is efficient. We then explore the effect of an initial information linkage between the buyer and supplier. Such linkages increase the set of innovations for which networks are efficient. However, such linkages have a negative effect on the buyer’s incentive to innovate and an ambiguous effect on the supplier’s incentive to invest in flexible production techniques. Finally, we identify settings in which the buyer‐supplier surplus is greater with such linkages. Date: 2002 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:joares:v:40:y:2002:i:2:p:247-278 Ordering information: This journal article can be ordered from Access Statistics for this article Journal of Accounting Research is currently edited by Philip G. Berger, Luzi Hail, Christian Leuz, Haresh Sapra, Douglas J. Skinner, Rodrigo Verdi and Regina Wittenberg Moerman More articles in Journal of Accounting Research from Wiley Blackwell |
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