Choice and performance of governance mechanisms: Matching contractual and relational governance to sources of asset specificity

We argue that the optimal configuration of contractual and relational governance mechanisms in an alliance is contingent not only on the amount of asset specificity, but on the nature of the asset involved in the alliance. Physical assets are more suited to contractual controls, while knowledge assets will be best suited to the use of relational governance mechanisms. Using data on alliances in the German telecommunications industry, we find that the choice of governance mechanisms is as hypothesized. In addition, relational and contractual governance mechanisms are perceived to perform better in the presence of knowledge and physical assets, respectively. Relational governance mechanisms improve overall alliance performance to the degree that knowledge assets are involved, but impair performance when property assets are involved. Our findings contribute to the literature on alliances, as well as the underlying literatures of transaction cost economics, the literature on relational governance, and recent work studying their interaction.Alliances, contractual governance mechanisms, relational governance mechanisms, asset specificity, telecommunications

The Effects of Liberalization on Litigation: Notes toward a Theory in the Context of Japan

This Essay examines the under-studied relationship between liberalization and litigation. Liberalization should lead to expanded civil litigation for four reasons: (1) new market entrants are less subject to informal sanctions and may have a greater propensity to go to court; (2) privatization transfers resources away from the state, expanding the number of transactions subject to civil law regimes; (3) liberalization reduces the government\u27s ability to resolve disputes outside the courts; and (4) liberalization leads to economic development, which is generally litigation-enhancing. We test these propositions using a unique dataset of prefecture-level civil litigation data in Japan during the 1990s. Using panel data, we find a small but significant effect of foreign firms on litigation. Reprinted by permission of the publisher

A concurrent reconceptualization of concurrent sourcing

Firms often procure the same input via multiple means, e.g., making and buying. Recent papers have yielded rich, but inconsistent, theoretical and empirical insights. Resolving these inconsistencies requires reconceptualizing two aspects of plural sourcing: what and how. We reconceptualize plural sourcing as a set of combined governance modes - make-and-buy, make-and-ally, and buy-and-ally - which differ in their capabilities and limitations. We demonstrate our reconceptualization's potential with propositions predicting the choice of specific plural sourcing modes

Access to Japanese aerospace-related scientific and technical information: The NASA Aerospace Database

With Japan's growing R&D strength in aerospace-related fields, it is increasingly important for U.S. researchers to be aware of Japanese advances. However, several factors make it difficult to do so. After reviewing the diffusion of aerospace STI in Japan, four factors which make it difficult for U.S. researchers to gather this information are discussed: language, the human network, information scatter, and document acquisition. NASA activities to alleviate these difficulties are described, beginning with a general overview of the NASA STI Program. The effects of the new National Level Agreement between NASA and NASDA are discussed

Theorizing the governance of direct and indirect transactions in multi-tier supply chains

An outsourcing decision does not equate to the outsourcing of a sourcing decision. Many indirect transactions with lower-tier suppliers are embedded in transactions with first-tier suppliers. Building on Williamson’s (1985) identification of a transaction as the fundamental unit of analysis, this study proposes that transactions comprise bundles of intertwined direct transactions at the firm level and indirect transactions at the supply chain level. These indirect transactions require separate but not independent sourcing decisions. Using a buyer’s decision to control or delegate the governance of indirect transactions for an externally sourced product, this study demonstrates that disaggregating the transaction advances theory by extending the range of outcomes, refining the calculus of the make-or-buy decision, and providing a coherent theoretical framework for multi-tier supply chain management. This study considers the theoretical, managerial, and societal implications across various contingencies involving inter-firm relationships

MKCORR: Stata module to generate correlation table formatted for easy inclusion in articles

mkcorr produces a correlation table in a format that is easy to import into a spreadsheet or word processing document. In this, it is inspired by the indispensable mktab and outreg commands. By writing the output directly to a logfile, it avoids two problems with taking correlation tables from the results window. First, it allows an effectively unlimited number of variables without wrapping around. Second, it requires less post-processing in a spreadsheet or word-processor, particularly for more involved tables. It also offers a number of small advantages such as allowing the use of labels, controlling the number of decimal places used, and other formating options.correlation, tables, publication output

Confounded Coefficients: Accurately Comparing Logit and Probit Coefficients across Groups

The logit and probit models are critical parts of the management researcher's analytical arsenal. We often want to know if a covariate has the same effect for different groups, e.g., foreign and domestic firms. Unfortunately, many attempts to compare the effect of covariates across groups make the unwarranted assumption that each group has the same residual variation. If this is not the case, comparisons of coefficients can reveal differences where none exist and conceal differences that do exist. This article explains the statistical and substantive implications of this assumption, introduces approaches to comparing coefficients that avoid making it, and uses simulations to explore the practical significance of the assumption and the power of approaches introduced to avoid it. As a practical example, I show that an apparent dramatic new insight into the technology strategy of Japanese computer manufacturers is actually just a manifestation of this problem. I close with implications for the practice of research.

Does It Matter If You Got It Wrong? Governance Misalignment, Opportunism and Performance

Studies on the effect of governance misalignment on opportunism and performance in buyer-supplier relationships are rare and the findings inconsistent. Drawing on transaction cost economics, we test the relationships between too high and too low levels of contractual and relational governance on ex-post opportunism and supplier performance. Our findings based on primary data from the German banking industry show that both under- and over-governance create trade-offs. Under-governance (contractual or relational) leads to more opportunism but also to higher performance. Over-governance in either dimension reduces opportunism but at the cost of lower performance, especially for relational governance mechanisms. Implications for future research are discussed