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Trust and formal contracts in interorganizational relationships - substitutes and complements

Author

Listed:
  • Thomas Mellewigt

    (Freie Universität Berlin, Institute for Management, Berlin, Germany)

  • Anoop Madhok
  • Antoinette Weibel

    (University of Zurich, Institute of Organization and Administrative Science, Zürich, Switzerland)

Abstract

We hypothesize that trust is a moderator of the direct relationship between control and coordination concerns and contractual complexity. Our results suggest that high trust weakens the positive relationship between control concerns and contractual complexity and reinforces the positive relationship between coordination concerns and contractual complexity. By highlighting the dual role of contracts (i.e. a controlling and coordinating function) and the moderating role of trust in this regard, our paper provides a new focus to the current discussion on the relationship between trust and contracts (i.e. substitutes or complements) that may help reconcile some divergent perspectives in the literature. Copyright © 2007 John Wiley & Sons, Ltd.

Suggested Citation

  • Thomas Mellewigt & Anoop Madhok & Antoinette Weibel, 2007. "Trust and formal contracts in interorganizational relationships - substitutes and complements," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(8), pages 833-847.
    • Handle: RePEc:wly:mgtdec:v:28:y:2007:i:8:p:833-847
    DOI: 10.1002/mde.1321
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    References listed on IDEAS

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