 Complexity of Outsourcing Contracts and Ex Post Transaction Costs: An Empirical InvestigationBertrand Quelin and
Jérôme Barthélemy
Post-Print from HAL Abstract: In this article, we use Transaction Cost Economics (TCE) and the Resource-Based View (RBV) of the firm to study outsourcing agreements. We develop an original approach of contract complexity and analyse the links among exchange hazards (i.e. specificity and environmental uncertainty), the contractual aspects of outsourcing (control, incentives, penalties, price and flexibility clauses) and the level of ex post transaction costs. Both contract complexity and ex post transaction costs are operationalized and measured. Our empirical research analyses 82 outsourcing contracts. This article uses three different dimensions (proximity to the core business, switching costs and adaptation costs) to assess the strategic importance of an outsourced activity. Our findings extend TCE's validity for the outsourcing of activities with a strategic value. Finally, this study offers an indirect measurement of ex post transaction costs. In short, to restrict vendor opportunism, contracts must contain incentives and penalties, as well as pricing and monitoring clauses Keywords: Outsourcing; costs; contracts (search for similar items in EconPapers) Published in Journal of Management Studies (Oxford, England), 2006, Vol. 43, n° 8, pp. 1777-1799. ⟨10.1111/j.1467-6486.2006.00658.x⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00459784 DOI: 10.1111/j.1467-6486.2006.00658.x Access Statistics for this paper More papers in Post-Print from HAL |
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