An exploration of the use of interfirm cooperation and the financial manager's governance roles: Evidence from Dutch firms

Abstract

Purpose

The purposes of this paper are to provide first a detailed description of the use of interfirm cooperation by a large sample of Dutch firms of different sizes and from different industries, and second, to examine the governance role of financial managers in the management of cooperative arrangements.

Design/methodology/approach

Research questions are developed based on a review of previous literature and data were collected using a questionnaire administered to a large sample of Dutch firms.

Findings

The paper finds that the sample firms are generally well engaged in various types of interfirm cooperation, in particular in outsourcing arrangements and joint ventures. In addition, larger firms are on average involved in more types of cooperation than smaller firms are, and different cooperative activities and forms are frequently used in combination. On average, financial managers report to be actively involved in the management of interfirm cooperation, which ranges from monitoring yearly results, providing advice, supervising performance, to managing daily operations of the cooperation. In this management role, they mostly use frequent detailed financial and non‐financial performance information, which often not only relates to their own firm, but also to the partner firm.

Practical implications

This research provides evidence of the extensive use of interfirm cooperation in practice and identifies an important governance role of financial managers in the management of interfirm cooperation. An analysis of differences in this role across different types of cooperation and functional levels of financial managers is provided.

Originality/value

The findings provide new insights into firms' use of a broad range of interfirm cooperative activities and into the governance role financial managers in these activities. Consistent with prior studies that document an increasing propensity of firms to engage in cooperative arrangements, the results support that interfirm cooperation constitutes an important area for research in accounting. This paper provides several suggestions for future research aimed at improving researchers' and practitioners' understanding of the management of interfirm cooperation.

Citation

Ding, R., Dekker, H.C. and Groot, T.L.C.M. (2010), "An exploration of the use of interfirm cooperation and the financial manager's governance roles: Evidence from Dutch firms", Journal of Accounting & Organizational Change, Vol. 6 No. 1, pp. 9-26. https://doi.org/10.1108/18325911011025678