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Transaction costs theory and coordinated safeguards investment in R&D offshoring

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  • Parida, Vinit
  • Wincent, Joakim
  • Oghazi, Pejvak

Abstract

In a multi-case study of R&D offshoring relationships in large manufacturing firms, this study develops an alternative view to that of transaction-cost theory, which argues that safeguard investments during the transition lead to higher transaction costs. This study outlines how fear of opportunism and the potential to violate agreements drive the need for complex safeguard devices. Results show that the sample firms benefit from high initial coordinated safeguard investments, because those investments reduce transactional costs overtime. More specifically, the study lists critical activities of such coordinated self-enforcing safeguard investments and calls for future attention to how firms manage transaction costs in R&D offshoring to secure long-term value.

Suggested Citation

  • Parida, Vinit & Wincent, Joakim & Oghazi, Pejvak, 2016. "Transaction costs theory and coordinated safeguards investment in R&D offshoring," Journal of Business Research, Elsevier, vol. 69(5), pages 1823-1828.
  • Handle: RePEc:eee:jbrese:v:69:y:2016:i:5:p:1823-1828
    DOI: 10.1016/j.jbusres.2015.10.063
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    References listed on IDEAS

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    Cited by:

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    9. Chi-Lin Yang & Jung-Ho Lai, 2021. "Influence of Cross-Listing on the Relationship between Financial Leverage and R&D Investment: A Sustainable Development Strategy," Sustainability, MDPI, vol. 13(18), pages 1-14, September.

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