The moderating effect of market knowledge on contractual efficacy: evidence from Asian supplier–Western buyer relationships

Umar Burki (), Richard Glavee-Geo (), Robert Dahlstrom (), Renger Kanani () and Arnt Buvik ()
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Umar Burki: History and Social Sciences, University of South-Eastern Norway
Richard Glavee-Geo: NTNU-Norwegian University of Science and Technology
Robert Dahlstrom: Miami University
Renger Kanani: University of Dar es salaam Business School
Arnt Buvik: Molde University College (Specialized University in Logistics)

Asian Business & Management, 2023, vol. 22, issue 4, No 9, 1454-1484

Abstract: Abstract This study employs transaction cost logic to investigate effects of market knowledge on formal contracting. The model maintains that market knowledge moderates the effects of supplier specific assets and buyer specific assets on contracting in international buyer–seller relationships. We collected survey data from 131 international buyer–supplier relationships and applied regression analysis to test the hypotheses. The data suggest that the need for formal contracts diminishes when substantial supplier specific assets accompany high market knowledge. In contrast, the need for formal contracting increases when substantial buyer specific assets are combined with high market knowledge. This study provides new insights for B2B marketing literature by shedding light on the influence of market knowledge on formal contracts. The discussion addresses the study’s implications for interorganizational theory and practice.

Keywords: Market knowledge; Specific assets; Formal contracting; International buyer–supplier relationships (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1057/s41291-022-00214-1

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