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Interfirm cooperation in strategic relationships: the role of formal contract

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  • Jean Beuve
  • Stéphane Saussier

Abstract

In this article, we use a large database of more than 3700 interfirm relationships in force between French firms in 2003 to study the way they achieve cooperation. We find that cooperation is enhanced by a partner's reputation. Our results also suggest that while formal contracts have a direct negative impact on ex-post cooperation, they are an enhancing factor of cooperative behaviors as soon as the intrinsic hazards of the relationship require higher ex-ante contractual safeguards to secure agreements. Copyright 2012 The Author 2011. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

Suggested Citation

  • Jean Beuve & Stéphane Saussier, 2012. "Interfirm cooperation in strategic relationships: the role of formal contract," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 21(4), pages 811-836, August.
    • Handle: RePEc:oup:indcch:v:21:y:2012:i:4:p:811-836
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    File URL: http://hdl.handle.net/10.1093/icc/dtr059
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    2. David A. Miller & Joel Watson, 2013. "A Theory of Disagreement in Repeated Games With Bargaining," Econometrica, Econometric Society, vol. 81(6), pages 2303-2350, November.
    3. Fu, Tong, 2020. "The dilemma of government intervention in a firm's financing: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 71(C).
    4. Fu, Tong & Jian, Ze, 2018. "Property rights protection, financial access and corporate R&D: Evidence from a large representative sample of Chinese firms," Economic Systems, Elsevier, vol. 42(2), pages 332-345.

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