EconPapers    
Economics at your fingertips  
 

The value of relationships: evidence from a supply shock to Kenyan rose exports

Rocco Macchiavello () and Ameet Morjaria

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper provides evidence on the importance of reputation in the context of the Kenyan rose export sector. A model of reputation and relational contracting is developed and tested. A seller's reputation is defined by buyer's beliefs about seller's reliability. We show that (i) due to lack of enforcement, the volume of trade is constrained by the value of the relationship; (ii) the value of the relationship increases with the age of the relationship; and (iii) during an exogenous negative supply shock deliveries are an inverted-U shaped function of relationship's age. Models exclusively focusing on enforcement or insurance considerations cannot account for the evidence.

JEL-codes: D86 F14 L14 O13 O19 Q17 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (54) Track citations by RSS feed

Published in American Economic Review, 2015, 105(9), pp. 2911-2945. ISSN: 0002-8282

Downloads: (external link)
http://eprints.lse.ac.uk/68207/ Open access version. (application/pdf)

Related works:
Journal Article: The Value of Relationships: Evidence from a Supply Shock to Kenyan Rose Exports (2015) Downloads
Working Paper: The Value of Relationships: Evidence from a Supply Shock to Kenyan Rose Exports (2013) Downloads
Working Paper: The Value of Relationships: Evidence from a Supply Shock to Kenyan Rose Exports (2013) Downloads
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:ehl:lserod:68207

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().

 
Page updated 2020-09-05
Handle: RePEc:ehl:lserod:68207