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Article: How foreign firms curtail local supplier opportunism in China: Detailed contracts, centralized control, and relational governance
Title | How foreign firms curtail local supplier opportunism in China: Detailed contracts, centralized control, and relational governance |
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Authors | |
Keywords | Buyer-Supplier Exchange China Opportunism Relational Exchange Theory Transaction Cost Economics |
Issue Date | 2012 |
Publisher | Palgrave Macmillan Ltd. The Journal's web site is located at http://www.palgrave-journals.com/jibs/index.html |
Citation | Journal Of International Business Studies, 2012, v. 43 n. 7, p. 677-692 How to Cite? |
Abstract | An ongoing debate in the interfirm exchange literature concerns whether economic and social governance mechanisms function as substitutes or complements. We advance a more nuanced approach to examining how detailed contracts and centralized control interact with relational governance differentially in curbing local supplier opportunism in emerging markets. We suggest that where legal institutions are weak, detailed contracts are ineffective in containing partner opportunism in contractually specified areas. Under such circumstances, relational governance provides a proxy for legal institutions to ensure contract execution. Meanwhile, relational governance serves as an alternative mechanism to centralized control for ensuring contingency adaptations. Based on a sample of 168 foreign buyer-local supplier exchanges in China, we find that relational governance complements detailed contracts but substitutes for centralized control in curtailing opportunism. Therefore foreign firms must be cautious in their combinative use of social and economic mechanisms in governing exchanges with local suppliers in emerging markets. © 2012 Academy of International Business All rights reserved. |
Persistent Identifier | http://hdl.handle.net/10722/178084 |
ISSN | 2021 Impact Factor: 11.103 2020 SCImago Journal Rankings: 4.819 |
ISI Accession Number ID | |
References |
DC Field | Value | Language |
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dc.contributor.author | Zhou, KZ | en_US |
dc.contributor.author | Xu, D | en_US |
dc.date.accessioned | 2012-12-19T09:41:51Z | - |
dc.date.available | 2012-12-19T09:41:51Z | - |
dc.date.issued | 2012 | en_US |
dc.identifier.citation | Journal Of International Business Studies, 2012, v. 43 n. 7, p. 677-692 | en_US |
dc.identifier.issn | 0047-2506 | en_US |
dc.identifier.uri | http://hdl.handle.net/10722/178084 | - |
dc.description.abstract | An ongoing debate in the interfirm exchange literature concerns whether economic and social governance mechanisms function as substitutes or complements. We advance a more nuanced approach to examining how detailed contracts and centralized control interact with relational governance differentially in curbing local supplier opportunism in emerging markets. We suggest that where legal institutions are weak, detailed contracts are ineffective in containing partner opportunism in contractually specified areas. Under such circumstances, relational governance provides a proxy for legal institutions to ensure contract execution. Meanwhile, relational governance serves as an alternative mechanism to centralized control for ensuring contingency adaptations. Based on a sample of 168 foreign buyer-local supplier exchanges in China, we find that relational governance complements detailed contracts but substitutes for centralized control in curtailing opportunism. Therefore foreign firms must be cautious in their combinative use of social and economic mechanisms in governing exchanges with local suppliers in emerging markets. © 2012 Academy of International Business All rights reserved. | en_US |
dc.language | eng | en_US |
dc.publisher | Palgrave Macmillan Ltd. The Journal's web site is located at http://www.palgrave-journals.com/jibs/index.html | en_US |
dc.relation.ispartof | Journal of International Business Studies | en_US |
dc.subject | Buyer-Supplier Exchange | en_US |
dc.subject | China | en_US |
dc.subject | Opportunism | en_US |
dc.subject | Relational Exchange Theory | en_US |
dc.subject | Transaction Cost Economics | en_US |
dc.title | How foreign firms curtail local supplier opportunism in China: Detailed contracts, centralized control, and relational governance | en_US |
dc.type | Article | en_US |
dc.identifier.email | Zhou, KZ: kevinz@hkucc.hku.hk | en_US |
dc.identifier.email | Xu, D: dxu@business.hku.hk | en_US |
dc.identifier.authority | Zhou, KZ=rp01127 | en_US |
dc.identifier.authority | Xu, D=rp01119 | en_US |
dc.description.nature | link_to_subscribed_fulltext | en_US |
dc.identifier.doi | 10.1057/jibs.2012.7 | en_US |
dc.identifier.scopus | eid_2-s2.0-84866916093 | en_US |
dc.identifier.hkuros | 215942 | - |
dc.relation.references | http://www.scopus.com/mlt/select.url?eid=2-s2.0-84866916093&selection=ref&src=s&origin=recordpage | en_US |
dc.identifier.volume | 43 | en_US |
dc.identifier.issue | 7 | en_US |
dc.identifier.spage | 677 | en_US |
dc.identifier.epage | 692 | en_US |
dc.identifier.isi | WOS:000309548800004 | - |
dc.publisher.place | United Kingdom | en_US |
dc.identifier.scopusauthorid | Zhou, KZ=7202914654 | en_US |
dc.identifier.scopusauthorid | Xu, D=7404073938 | en_US |
dc.identifier.issnl | 0047-2506 | - |