Transaction cost analysis of supply chain logistics services: firm-based versus port-focal

John J Liu, Ziping Wang, Dong-Qing Yao and Xiaohang Yue
Additional contact information
John J Liu: City University of Hong Kong, Hong Kong, PR China
Ziping Wang: Morgan State University, Baltimore, USA
Dong-Qing Yao: Towson University, Baltimore, USA
Xiaohang Yue: University of Wisconsin-Milwaukee, Milwaukee, USA

Journal of the Operational Research Society, 2016, vol. 67, issue 2, 176-186

Abstract: With the overwhelming findings that systemic risk dominates idiosyncratic risk in individual firms along a supply chain or in an industrial sector, and noting the fact that supply chain literature so far has been firm-based, it is critical to analyse inter-firm transactions and related risks which have largely been omitted from current supply chain research. To advance along this critical dimension, we develop a transaction cost frontier model that allows inter-firm transaction facilities in terms of a port-focal supply chain modelling framework. The key findings are as follows. (1) Environment heterogeneity is a characteristic transaction attribute, and logistics efficiency is critically dependent on both intra-firm asset specificity (Williamson, 2002) and inter-firm environment heterogeneity when ports are considered as transaction facilities. Port logistics demonstrates that horizontal integration (as opposed to vertical integration) becomes more cost effective as environment heterogeneity increases, given the same degree of asset specificity among individual ports. (2) An adaptive advantage (eg, transaction efficiency) is identified and characterized through the port-focal industrialization of supply chains, and is found to be an explanatory cause for the geographically concentrated horizontal specialization and differentiation, as increasingly observed in practice. Logistics industrialization will bring about the growth of port-focal urbanization.

Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.palgrave-journals.com/jors/journal/v67/n2/pdf/jors2014117a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/jors/journal/v67/n2/full/jors2014117a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

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:pal:jorsoc:v:67:y:2016:i:2:p:176-186

Ordering information: This journal article can be ordered from
http://www.springer. ... search/journal/41274

Access Statistics for this article

Journal of the Operational Research Society is currently edited by Tom Archibald and Jonathan Crook

More articles in Journal of the Operational Research Society from Palgrave Macmillan, The OR Society
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().