Search

Purpose: Based on social capital theory and the institutional theory, this paper aims to explain how a firm's business ties and political ties affect contractual governance in an interfirm cooperation, and under which institutional conditions they can play a better role. Design/methodology/approach: This study tests conceptual model using questionnaire survey data collected from 227 firms in China. Hierarchical regression analysis is used to test the hypotheses. Findings: This study finds that business ties have significant effect on contract completeness, while political ties have significant effect on contract enforcement. Moreover, these effects are contingent on some institutional factors. Market information transparency strengthens the effect of business ties on contract completeness and weakens the effect of political ties on contract completeness. Legal system completeness weakens the effect of political ties on contract enforcement. Practical implications: This study suggests that managers could actively and selectively use their managerial ties to enhance contractual governance in an interfirm cooperation. Originality/value: This study adds to the current understanding of how an interfirm cooperation is shaped by the firm's social capital derived from external network relationships and extends the research on what social antecedents affect contractual governance. Moreover, this study sheds new light on when managerial ties can play a more beneficial role in emerging economies. [ABSTRACT FROM AUTHOR] more...

The importance of project governance in curbing opportunistic behavior (OB) has been clearly established in the project literature. Although contract governance and trust are considered critical factors that explain project governance, there is a lack of understanding regarding their interplay at various stages of project development. The current study takes a dynamic perspective and breaks down contract governance into contract completeness (CC) and contract enforcement (CE), while differentiating ex-ante trust from ex-post trust. As such, the current study takes a dynamic perspective and the Grossman-Hart-Moore (GHM) model, which aims to investigate how each of the two facets of contract governance and trust intertwine during the management of construction projects as well as their effects on OB. We undertook a questionnaire survey of individuals involved in 342 construction projects in China, and our research results show that, first of all, governance mechanisms at different stages have different inhibitory effects on OB. Taking contract-signing as the boundary, the governance effect of a contract is gradually enhanced, while the governance effect of trust is gradually reduced. Second, ex-ante trust is more important than ex-post trust: the former moderates not only the relationship between CE and OB, but also the influence of CC on OB. Finally, a contract that is overly complete is not conducive to precluding OB, as such completeness can give the contract parties a sense of security that is guaranteed. The current study not only garners insights into project governance research but also provides implications for architectural practitioners in deploying resources that relate to governance mechanisms. [ABSTRACT FROM AUTHOR] more...

Scholars have conducted extensive research regarding contractual governance in marketing channels. Operationalizing contractual governance intensity as contract specificity, researchers focused on the impact of contract specificity, while little effort has been paid to the impact of contract enforcement. As a distinct construct of contractual governance mechanism, contract enforcement largely determines the integrity of contracts and the effectiveness of their coordination effects. Dividing contractual governance into contract specificity and contract enforcement, this paper examines the direct and interactive effects of contract specificity and contract enforcement on channel opportunism and conflict. It tries to answer: (1) How do contract specificity and distributor contract enforcement affect supplier opportunism and channel conflict respectively? (2) What are the interactive effect of specificity and enforcement when they are considered simultaneously? The paper proposed a research model by taking contract specificity, distributor contract enforcement and their interaction as the antecedents, and supplier opportunism and channel conflict between distributor and supplier as the consequences. To test the model, with the help of a large domestic household appliance supplier in China, we collected data from the side of distributors, and analyzed the data from 607 valid responses with structural equation model (SEM). Both contract specificity and distributor contract enforcement would respectively inhibit supplier opportunism, and supplier opportunism in turn would be positively associated with channel conflict. On the other hand, distributor contract enforcement would increase, while contract specificity would have an insignificant impact on, channel conflict. In addition, interaction between distributor contract enforcement and contract specificity would reduce both supplier opportunism and channel conflict. This paper tries to make three contributions. First, it investigated the impact of contractual governance in marketing channels in more depth by dividing contractual governance into two dimensions, namely contractual specificity and contract enforcement, enriching the literature of contractual governance in marketing channels. Second, it empirically tested the impacts of contract enforcement on supplier opportunism and channel conflict between distributor and supplier, to which previous studies have paid little attention. Third, it for the first time considered the interactive effects of contract specificity and contract enforcement on channel opportunism and channel conflict. As a result, it provides a new line of explanation for previous inconsistencies in the effect of contract specificity on channel opportunism as well as channel enforcement on channel opportunism. Firms are encouraged to draft specific contracts with their channel partners despite the time and effort required by both parties based on the findings of this research and previous studies. However, contracts should be carefully enforced. According to the findings of this study, if imposed highly strict, contract enforcement may intensify channel conflict between partners. [ABSTRACT FROM AUTHOR] more...

Purpose: This study investigates both direct and moderation effects of two dimensions of contract control and information technology governance on platform participants' financial performance. Design/methodology/approach: Using data collected from 384 platform participants from China's two largest digital platforms, hierarchical regression is used to validate the conceptual model and hypotheses. Findings: The empirical results show that contract completeness and information technology governance independently improved financial performance, while contract enforcement had an inverted U-shaped effect on financial performance. Furthermore, information technology governance amplified the positive effect of contract completeness, but not of contract enforcement, on financial performance. Originality/value: This study advances the literature on partnership control by showing the interactive role of information technology governance and contract control. It also enriches research on information technology usage by revealing how information technology governance benefits business partnerships. Finally, it extends transaction cost theory by demonstrating that different dimensions of contracts have different effects on governing interfirm relationships. [ABSTRACT FROM AUTHOR] more...

Abstract: This paper empirically investigates the relationship between contractual arrangements and their enforcement in Chinese agriculture. Based on an analysis of a survey of 100 agribusiness firms engaged in contract farming in Zhejiang province of China, we find that private contract enforcement mechanisms play an important role in influencing smallholders’ decisions to breach or fulfill contracts. Contract arrangements such as floor pricing, or requiring smallholders to make specific investments facilitate self-enforcement and significantly improve the smallholder’s contract fulfillment rate. This is particularly important in Chinese agriculture since the business environment is characterized by an absence of effective public enforcement institutions. [Copyright &y& Elsevier] more...