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Ex Post Problems in Buyer–Supplier Transactions: Effects of Transaction Characteristics, Social Embeddedness, and Contractual Governance

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  • Gerrit Rooks
  • Werner Raub
  • Frits Tazelaar

Abstract

This paper focuses on ex post governance of inter-firm transactions. We develop and test hypotheses on the occurrence of ex post problems like delivery delays, inferior quality, and insufficient service in buyer–supplier transactions. Our hypotheses address effects of transaction characteristics, of social embeddedness, and of contractual governance on the occurrence of problems. Other than earlier research on embeddedness effects in this field, we consider not only effects of dyadic embeddedness but also effects of network embeddedness. We test hypotheses using rich survey data on more than 1200 purchases of information technology (IT) products: hardware and software, both standard and complex. We find evidence for effects of transaction characteristics on the occurrence of problems, while our data do not support hypotheses on effects of contractual governance. Our data provide rather consistent support for hypotheses on the effects of embeddedness. Specifically, we find evidence that network embeddedness reduces problems. Copyright Springer Science+Business Media, Inc. 2006

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  • Gerrit Rooks & Werner Raub & Frits Tazelaar, 2006. "Ex Post Problems in Buyer–Supplier Transactions: Effects of Transaction Characteristics, Social Embeddedness, and Contractual Governance," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 10(3), pages 239-276, September.
    • Handle: RePEc:kap:jmgtgv:v:10:y:2006:i:3:p:239-276
    DOI: 10.1007/s10997-006-9000-7
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    3. Abraham, Martin, 2009. "Why reputation is not always beneficial: Tolerance and opportunism in business networks," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(6), pages 908-915, December.
    4. Josanco Floreani & Maurizio Polato, 2010. "Consolidation and Business Strategies in the Securities Industry: How Securities Exchanges Create Value?," Research in World Economy, Research in World Economy, Sciedu Press, vol. 1(1), pages 28-42, November.
    5. Mu, Rui & Jong, Martin de & Koppenjan, Joop, 2011. "The rise and fall of Public–Private Partnerships in China: a path-dependent approach," Journal of Transport Geography, Elsevier, vol. 19(4), pages 794-806.
    6. Rense Corten & Judith Kas & Timm Teubner & Martijn Arets, 2023. "The role of contextual and contentual signals for online trust: Evidence from a crowd work experiment," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-17, December.
    7. Mooi, Erik A. & Gilliland, David I., 2013. "How contracts and enforcement explain transaction outcomes," International Journal of Research in Marketing, Elsevier, vol. 30(4), pages 395-405.
    8. Maurizio Polato & Josanco Floreani, 2008. "Business Diversification in the Securities Industry: Implications for the Exchanges," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 15(2), pages 281-288, September.
    9. Kiron Ravindran & Anjana Susarla & Deepa Mani & Vijay Gurbaxani, 2015. "Social Capital and Contract Duration in Buyer-Supplier Networks for Information Technology Outsourcing," Information Systems Research, INFORMS, vol. 26(2), pages 379-397, June.
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