Governance mechanisms in transnational business relationships

Empirical research on buyer-supplier relationships has almost exclusively examined domestic (both firms from the same country) exchange. The growing importance of international marketing and global sourcing suggest a need to understand relationships across national boundaries -- transnational business relationships. Drawing on theories of governance, the authors hypothesize differences in governance between domestic and transnational business relationships. They examine the use of three specific governance mechanisms (market governance, trust, and formal contracts) commonly employed in buyer-supplier relationships. Hypotheses are tested with data from 511 purchasing professionals in the United States and Germany (201 reporting on transnational relationships). Results indicate that market governance and trust are used less in transnational than in domestic relationships. No differences are found in the use of contracts. Implications for theory and practice are discussed

Endogenous Enforcement of Intellectual Property, North-South Trade, and Growth

While most countries have harmonized intellectual property rights (IPR) legislation, the dispute about the optimal level of IPR-enforcement remains. This paper develops an endogenous growth framework with two open economies satisfying the classical North-South assumptions to study (a) IPR-enforcement in a decentralized game and (b) the desired globally-harmonized IPR-enforcement of the two regions. The results are compared to the constrained-efficient enforcement level. Our main insights are: The regions' desired harmonized enforcement levels are higher than their equilibrium choices, however, the gap between the two shrinks with relative market size. While growth rates substiantially increase when IPR-enforcement is harmonized at the North's desired level, our numerical simulation suggests that the South may also benefit in terms of long-run welfare