Hybrid governance and governance performance in industrial purchasing relationships

Arnt Buvik

Scandinavian Journal of Management, 2002, vol. 18, issue 4, 567-587

Abstract: Hybrid governance arrangements (e.g. joint action, long-term contracting and vertical coordination) feature regularly as an effective response to inter-firm dependence in the literature of business-to-business relationships. However, current empirical work has paid little attention to whether such governance arrangements really do improve governance efficacy and reduce transaction costs. The present study focuses on the governance efficacy of vertical coordination in industrial business-to-business relationships. Building on transaction costs arguments, the author examines whether vertical coordination is an effective means for adapting to inter-firm dependence, realized as the substantial employment of specific assets. Empirical findings from a survey of 170 industrial supplier-buyer relationships demonstrate that when asset specificity reaches a certain level, greater vertical coordination reduces ex post transaction costs significantly. On the other hand, this efficacy pattern is modest or non-existent in relationships with low asset specificity. The research findings support the basic TCA assumption that the performance of hybrid governance arrangements is highly dependent on a situation of substantial inter-firm dependence with subsequent small-number conditions.

Keywords: Industrial; buyer-seller; relationships; Relationship; marketing; Transaction; costs; analysis (search for similar items in EconPapers)
Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0956522101000306
Full text for ScienceDirect subscribers only

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:eee:scaman:v:18:y:2002:i:4:p:567-587

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/872/bibliographic
http://www.elsevier. ... me/872/bibliographic

Access Statistics for this article

Scandinavian Journal of Management is currently edited by Janne Tienari

More articles in Scandinavian Journal of Management from Elsevier
Bibliographic data for series maintained by Catherine Liu ().