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When does a partner’s reputation impact cooperation effects in partnerships?

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  • Zhe Zhang
  • Ming Jia
  • Difang Wan

Abstract

We examine how formal contracts moderate the relationship between a partner’s reputation and cooperation effects in public-private (P-P) partnerships. We base our analysis on differences between formal contracts, which require a series of legal agreements, and informal contracts, which may be implicit and/or unwritten. We argue that a partner’s reputation is more likely to impact cooperation effects in the context of strong formal or informal contracts. Using a sample of 244 partners from various P-P partnerships in the medical and healthcare fields in China, we find that the positive relationship between a partner’s reputation and cooperation effects is stronger given the existence of strong formal and/or informal contracts. We conclude that in China, where there is a weak legal system that rarely offers or enforces sufficient protections to contract signatories, it is safer to cooperate with a partner who has a good reputation. Such a reputation correspondingly enhances cooperation effects. Moreover, this relationship may be amplified when there are strong formal and/or informal contracts, all of which may be associated with cooperation between the public and private sectors. Copyright Springer Science+Business Media, LLC 2012

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  • Zhe Zhang & Ming Jia & Difang Wan, 2012. "When does a partner’s reputation impact cooperation effects in partnerships?," Asia Pacific Journal of Management, Springer, vol. 29(3), pages 547-571, September.
    • Handle: RePEc:kap:asiapa:v:29:y:2012:i:3:p:547-571
    DOI: 10.1007/s10490-010-9197-5
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