The Value of Relationships: Evidence from a Supply Shock to Kenyan Rose Exports

Rocco Macchiavello and Ameet Morjaria

No 270427, Economic Research Papers from University of Warwick - Department of Economics

Abstract: This paper provides evidence on the importance of reputation, intended as beliefs buyers hold about sellerís reliability, in the context of the Kenyan rose export sector. A model of reputation and relational contracting is developed and tested. We show that 1) the value of the relationship increases with the age of the relationship; 2) during an exogenous negative supply shock sellers prioritize relationships consistently with the predictions of the model; and 3) reliability at the time of the shock positively correlates with future survival and relationship value. Models exclusively focussing on enforcement or insurance considerations cannot account for the evidence.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 49
Date: 2013-06
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The Value of Relationships: Evidence from a Supply Shock to Kenyan Rose Exports (2015)
Working Paper: The value of relationships: evidence from a supply shock to Kenyan rose exports (2015)
Working Paper: The Value of Relationships: Evidence from a Supply Shock to Kenyan Rose Exports (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:270427

DOI: 10.22004/ag.econ.270427

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