Understanding governance structures of accounting: Trust relationships, transaction costs, and the make‐or‐buy decision

Lars Fallan (Trondheim Business School, N‐7004 Trondheim, Norway and Norwegian School of Economics and Business Administration, Helleveien 30, N‐5045 Bergen, Norway)

Journal of Applied Accounting Research

ISSN: 0967-5426

Publication date: 1 December 2000

Abstract

In the present study a model based on trust relations and transaction cost analysis has been applied to explain the make‐or‐buy decision for accounting services. The present model of efficient boundaries, which combines the focus on trust relations with the transactional focus on frequency and asset specificity, has predictive power of the governance of accounting services. The effects of asset specificity on the make‐or‐buy decision of accounting services were substantially overshadowed by the relational attribute of trust and the transactional attribute of frequency. The study reveals strong support for the hypothesized positive link between trust and the buy alternative and the negative association between frequency of accounting transactions and the buy alternative. The present model has predictive power for an overall correct classification of the make‐or‐buy decision for accounting services.

Keywords

Citation

Fallan, L. (2000), "Understanding governance structures of accounting: Trust relationships, transaction costs, and the make‐or‐buy decision ", Journal of Applied Accounting Research, Vol. 6 No. 1, pp. 52-84. https://doi.org/10.1108/96754260080001022

Download as .RIS

Publisher

:

MCB UP Ltd

Copyright © 2000, MCB UP Limited

Please note you might not have access to this content

You may be able to access this content by login via Shibboleth, Open Athens or with your Emerald account.
If you would like to contact us about accessing this content, click the button and fill out the form.
To rent this content from Deepdyve, please click the button.