Reputation flows: Contractual disputes and the channels for inter-firm communication

William Pyle

No B 21-2003, ZEI Working Papers from University of Bonn, ZEI - Center for European Integration Studies

Abstract: Inter-firm information exchange with respect to the reliability of trade partners may be unmediated in the sense that it involves direct communication between the personnel of two firms. Alternatively, this information flow may be channeled by or through an organization such as a trade association. We assess the relationship between these two mechanisms for conveying reputational information. Based on evidence from five transition countries, we find that trade associations’ role as informational intermediaries in this regard is sensitive to the geographic relationship between a potential supplier (demander) of reputational information and the firm whose behavior may be reported (acquired). What is more, the use of trade associations as conduits for reputation flows is more strategic than the use of unmediated communication in that the former is highly sensitive to the effects of market structure.

Keywords: reputation; information; transition; trade associations (search for similar items in EconPapers)
JEL-codes: D83 L2 O17 P3 (search for similar items in EconPapers)
Date: 2003
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Working Paper: Reputation Flows: Contractual Disputes and the Channels for Inter-firm Communication (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zeiwps:b212003

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