The influence of unilateral supplier transaction-specific investments on international buyer opportunism: empirical findings from local suppliers in China
International Marketing Review
ISSN: 0265-1335
Article publication date: 19 May 2020
Issue publication date: 19 May 2020
Abstract
Purpose
This study examines how unilateral supplier transaction-specific investments (TSIs), directly and indirectly, influence international buyer opportunism and the extent to which detailed contracts enable suppliers to safeguard against international buyer opportunism. The study also examines whether relationship length affects the efficacy of detailed contracts in cross-border outsourcing relationships.
Design/methodology/approach
The hypotheses are tested by using data collected from multiple informants working for 229 manufacturing suppliers in China. Multiple regression with a three-way interaction is used to test the hypotheses.
Findings
Unilateral supplier TSIs encourage international buyer opportunism through increased supplier dependence. Contract specificity negatively moderates the effect of supplier dependence on international buyer opportunism. This moderating effect is stronger in long-term cross-border buyer–supplier relationships than in short-term ones.
Originality/value
The current study extends the cross-border outsourcing literature by examining how emerging-market suppliers in a weak power position can proactively safeguard against international buyer opportunism by using detailed contracts. Our findings show that supplier dependence mediates the relationship between unilateral supplier TSIs and international buyer opportunism; detailed contracts, however, can help dependent suppliers safeguard against international buyer opportunism. In particular, the findings highlight the importance of long-term buyer–supplier relationships that enhance the efficacy of detailed contracts.
Keywords
Acknowledgements
We acknowledge the funding support by National Natural Science Foundation of China (No. 71572032, 71503123, and 71711540044), The Soft Science Project of Shanghai Science and Technology Commission (No. 19692107100), The Fundamental Research Funds for the Central Universities (No. 2017405), and Donghuahengyi Program (No. 2018405).
Citation
Wang, L., Zhang, C., Li, J., Huo, D. and Fan, X. (2020), "The influence of unilateral supplier transaction-specific investments on international buyer opportunism: empirical findings from local suppliers in China", International Marketing Review, Vol. 37 No. 2, pp. 213-239. https://doi.org/10.1108/IMR-05-2018-0177
Publisher
:Emerald Publishing Limited
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