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Transaction Cost Economics and Contractual Relations

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  • Maher, Maria E

Abstract

One of the key factors in the study of transaction costs economics is the concept of opportunism. Williamson (1986) develops a heuristic model of transaction costs and governance structures in which the critical dimensions, with respect to which transaction costs differ, are identified: the frequency of exchange, the degree of relationship-specific investment, and uncertainty. This work examines whether there is empirical support for Williamson's model. Firms in four different industries were interviewed about their contractual relationships with their customers or suppliers. The degree of transaction costs differs both across industries and across firms within an industry. Although the author finds that there is strong support for the Williamson (1986) model, a critical dimension omitted from this model is market structure. By affecting the risks of opportunism, she finds that market structure also has important consequences for the nature of contractual relations governing firms' transactions. Copyright 1997 by Oxford University Press.

Suggested Citation

  • Maher, Maria E, 1997. "Transaction Cost Economics and Contractual Relations," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 21(2), pages 147-170, March.
    • Handle: RePEc:oup:cambje:v:21:y:1997:i:2:p:147-70
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    Cited by:

    1. T Quince, 2001. "Entrepreneurial Collaboration: Terms of Endearment or Rules of Engagement?," Working Papers wp207, Centre for Business Research, University of Cambridge.
    2. Hammad Siddiqi, 2011. "A Creative Institutional Response to Twin Problems of Liquidity and Information Gaps in Certain Emerging Markets," International Review of Finance, International Review of Finance Ltd., vol. 11(4), pages 537-552, December.
    3. 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.
    4. Shufen Tang & Yuqing Zheng & Taiping Li & Li Zhou, 2021. "The hold‐up problem in China's broiler industry: Empirical evidence from Jiangsu Province," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(4), pages 539-554, December.
    5. Christian Balcells, 2022. "Determinants of firm boundaries and organizational performance: an empirical investigation of the Chilean truck market," Journal of Evolutionary Economics, Springer, vol. 32(2), pages 423-461, April.
    6. Tang, Shufen & Zheng, Yuqing & Li, Taiping & Zhou, Li, 2021. "The Hold-up Problem in China’s Broiler Industry: Empirical Evidence from Jiangsu Province," 2021 ASAE 10th International Conference (Virtual), January 11-13, Beijing, China 329410, Asian Society of Agricultural Economists (ASAE).
    7. Dubrovsky, Valery & Yaroshevich, Natalya & Kuzmin, Evgeny, 2016. "Transactional approach in assessment of operational performance of companies in transport infrastructure," MPRA Paper 72001, University Library of Munich, Germany.
    8. Laura Onofri & Samuele Trestini & Fateh Mamine & Jason Loughrey, 2023. "Understanding agricultural land leasing in Ireland: a transaction cost approach," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 11(1), pages 1-20, December.

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