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The purpose of this paper is to empirically investigate the effects of cooperation history on contractual governance and the moderating effects of dependence asymmetry on those relationships from the perspective of a weaker firm in emergent economies. Drawing from resource dependence theory and contingency theory, this paper develops a conceptual model to investigate the impact of cooperation history on contractual governance.

The authors use data from 188 buyer–supplier relationships in China

The authors find that cooperation history is positively associated with contractual governance when dependence asymmetry is high but negatively associated with contractual governance when dependence asymmetry is low. Furthermore, the negative moderating effect of dependence asymmetry on the relationship between cooperation history and contractual complexity is stronger than the relationship between cooperation history and contract enforcement.

This study contributes to a better understanding of how cooperation history affects contractual governance with respect to the various levels of dependence on partners by incorporating a contingency view. This study also advances the literature on interfirm governance by distinguishing contractual governance into contractual complexity and contract enforcement.

This paper aims to examine alliance governance at different hierarchical levels.

The data is collected from both top-level and operating-level managers in 286 strategic alliances in China (a total of 572 managers). Hierarchical moderated regression models are adopted to test the hypotheses and two-stage regression analyzes are used to correct for endogeneity.

This paper finds that relational governance has a greater impact on alliance performance than contract utilization at the top level. Furthermore, the simultaneous use of relational governance at the top and operating levels have a detrimental impact on alliance performance. Finally, top-level contract utilization has a negative interaction with operating-level relational governance but a positive interaction with operating-level contract utilization.

First, the cross-sectional nature of the data collection approach provides only a snapshot of how each type of governance mechanism and its interactions affect alliance performance. Second, the sample is limited to firms located in emerging markets.

Managers should realize that the effectiveness of contract and relational governance mechanisms varies across different management levels and they should be cautious about the cross-level governance mechanism alignment.

This study advances the interfirm governance literature in that this paper examined alliance governance at different hierarchical levels and provides new insights into the ongoing debate on whether the contract and relational governance mechanisms function as complements or substitutes by exploring the governance alignment across different alliance hierarchies.

The purpose of this paper is to explain the variation in the relationship between governance mechanisms and the effect of the relationship on contract performance, especially in controlling partner opportunism.

This study conducts a comparative case analysis of contract governance of “National Health Insurance Program” in India. The data are collected using field research through in-depth interviews and direct observation across three states in India.

The authors find that the governance mechanisms continue to complement and substitute, both in a dynamic manner, but until aligned with the nature of transaction, they are ineffective to mitigate opportunism, a critical dimension of contract performance. Inappropriate governance mechanisms inflate the gaps in incomplete contracts, resulting in partner opportunism.

The study draws findings from healthcare context and service-based contracting; therefore, the applicability of this study may vary in other contexts.

The paper highlights the need for building flexibility in the governance structure while designing contracts. Further, managers need to combine both governance mechanisms dynamically to align with the nature of the transaction to control partner opportunism.

The authors contribute to the existing debate on the conundrum of the relationship between governance mechanisms and provide a new explanation. The authors propose that it is not the specific governance mechanisms but the alignment of the governance mix with the nature of the transaction that determines the contract performance, especially control of partner opportunism.

This study aims to investigate how contract complexity and relational trust could impact offshore outsourcing innovation (OOI) performance of small and medium enterprises (SMEs). This study further examines the moderating effects of knowledge routines and joint actions on the relationships between contract complexity, as well as relational trust and OOI performance.

The empirical investigation extends transaction cost economics and the relational view of buyer-supplier dyads in the context of offshore outsourcing SMEs. To test the hypotheses, the authors collected and analysed survey data from 200 European manufacturing SMEs that have existing offshore supplier relationships.

The results suggest that both complex contracts and relational trust as governance structures positively affect SMEs’ OOI performance. Additionally, while both formal knowledge routines and joint actions help strengthen the relationship between complex contracts and OOI, they showed no significant moderating effect on the relationship between relational trust and OOI. Furthermore, based on the results, the authors also develop a governance framework covering four configurations – fit, firm, flexible and fragile (4F).

The 4F governance scenarios – fit, firm, flexible and fragile – introduced in this study emphasise the need for a combination of contract complexity and relational trust mechanisms in OOI relationships. The 4F labelling has rich implications for practitioners on how interfirm outsourcing innovation relationships can be managed based on configurations of contractual and relational governance. The study also adds to the understanding of how SMEs’ specific characteristics (e.g. resource shortcomings and flexibility) may influence their OOI decisions in comparison with large firms.

As outsourcing continues to grow, supplier management becomes critical to the success of manufacturing firms. Transaction cost economics (TCE) suggests that firms should choose supplier governance mechanisms to ensure fulfillment of contractual obligations and safeguard against opportunism for their outsourcing activities. Accordingly, the purpose of this paper is to examine how buying organizations govern supplier contracts to improve manufacturing competitiveness and financial performance. The relative effectiveness of two primary governance mechanisms, contractual governance (CG), and relational governance, are examined.

Expanding upon previous studies, this study delineates three relational governance mechanisms (negotiation efficiency (NE), problem solving relations, and information sharing (IS)) that are conceptually, statistically and pragmatically different. Based on the TCE literature, a conceptual model is developed to decipher the relationships between pre-contract conditions (supplier asset specificity and environmental uncertainty (EU)), governance mechanisms, performance ambiguity (PA), and performance. Using the data collected from 987 firms, the statistical results present several important findings that would advance current theory and practice in outsourcing.

The authors find empirical support for the effects of contractual and relational governance in improving manufacturing and financial performance. The governance of supplier contracts clearly facilitates manufacturers’ ability to leverage their resources to improve performance. The relative effectiveness of these two governance mechanisms is related to the levels of EU and supplier asset specificity. Relational governance displays greater influence on performance than CG does. However, CG appears to be complementary to relational governance.

The interplays between supplier asset specificity and EU should be examined in the future. The relationships among NE, IS, and problem solving should also be examined to facilitate the development of relational governance.

Managers should be aware of the situational performance of governance mechanisms. Moreover, it is important to realize how differently each of the three relational governance mechanisms and CG contribute to performance.

This study extends the academic discussion of supplier governance by investigating the alignment of governance mechanisms (relational governance and CG) with pre-contract conditions to reduce PA and, thereby, enhance manufacturing performance. Under the theoretical framework of TCE, the direct and indirect effects of pre-contract conditions and governance variables are fully examined and discussed. Moreover, relational governance involves multiple mechanisms that are conceptually and pragmatically different, and future studies should not treat it as one single construct.

In this chapter muamalah contracts are developed through the derivation of the respective rules from the requirement of shari'ah, not only avoiding the prohibited items in commercial transaction but at the same time enforcing the rights of parties to the contract in accordance with the contractual needs. Thus, these contracts safeguard the parties from being victim of the other in pursuing their commercial gains. The study examines the requirement of mudarabah and musyarakah contracts in the context of the relationship between shareholders and corporation as a foundation of a sound corporate governance mechanism. It is derived that the muamalah contracts if applied in its true nature are capable of defining and protecting the rights of all parties ridding crucial corporate governance concern which are mostly incited by the distrust of the parties in the running of the corporation and generation of benefits.

The purpose of this paper is to examine the dynamics of contractual and relational mechanisms during different phases of multi-partner R&D alliances.

The paper uses a longitudinal single case study to gain in-depth understanding of which governance mechanisms are best suited for different phases of alliance collaboration. Applying a retrospective strategy for data collection, three rounds of interviews were conducted with representatives of all partner firms. The data were complemented by documentary analysis of both internal documents and publicly available information.

The findings suggest that the use of governance mechanisms in multi-partner alliances depends on the characteristics of alliance phases. Relational governance is most important in the exploration and development phases, while the importance of contractual governance comes to the fore during the development and finalization phases. Despite the predominance of one type of mechanism, the findings support a complementary perspective of governance mechanisms.

The results of a single case study offer limited generalizability and should thus be treated with caution. More cross-industry, cross-national studies should be conducted to verify the applicability of the findings to other industries, cultures and geographical contexts.

Managers should be aware that different phases of the alliance life cycle have different control and coordination needs, and should rely on different mechanisms during different phases of the alliance.

The authors have synthesized insights from various perspectives (transaction cost economics, organization theory, social exchange theory), and developed a multidisciplinary approach to multi-partner collaborations.

Inter-organisational governance is an important enabler for information processing, particularly in relationships undergoing digital transformation (DT) where partners depend on each other for information in decision-making. Based on information processing theory (IPT), the authors theoretically and empirically investigate how governance mechanisms address information asymmetry (uncertainty and equivocality) arising in capturing, sharing and interpreting information generated by digital technologies.

IPT is applied to four cases of public–private relationships in the Dutch infrastructure sector that aim to enhance the quantity and quality of information-based decision-making by implementing digital technologies. The investigated relationships are characterised by differing degrees and types of information uncertainty and equivocality. The authors build on rich data sets including archival data, observations, contract documents and interviews.

Addressing information uncertainty requires invoking contractual control and coordination. Contract clauses should be precise and incentive schemes functional in terms of information requirements. Information equivocality is best addressed by using relational governance. Identifying information requirements and reducing information uncertainty are a prerequisite for the transformation activities that organisations perform to reduce information equivocality.

The study offers insights into the roles of both governance mechanisms in managing information asymmetry in public–private relationships. The study uncovers key activities for gathering, sharing and transforming information when using digital technologies.

This study draws on IPT to study public–private relationships undergoing DT. The study links contractual control and coordination as well as relational governance mechanisms to information-processing activities that organisations deploy to reduce information uncertainty and equivocality.

This study examines how project uncertainties (environmental uncertainty and participant uncertainty) affect guanxi and contractual governance and assesses the mediating role of guanxi governance between project uncertainty and contractual governance.

Data were collected in two stages from Chinese contractors. First, in-depth interviews were conducted with nine construction engineering project practitioners in different contracts as a pilot for questionnaire designing. Second, a cross-sectional questionnaire survey was conducted with professionals and practitioners of construction enterprises to collect primary data. Partial least squares structural equation modeling (PLS-SEM) was used to test seven hypotheses based on data collected from 198 respondents.

Project environmental uncertainty promotes the use of guanxi governance, while project participant uncertainty hinders it; the relationship between both types of uncertainty and contractual governance is the same as with guanxi governance. Furthermore, guanxi governance promotes contractual governance and partially mediates project environmental uncertainty and contractual governance and a complete mediating role between project participant uncertainty and contractual governance.

As the interviewed samples are mainly from China, the study should be replicated using large representative samples from East Asian countries, such as Japan and South Korea, to gain a more comprehensive understanding of the influence of guanxi governance. Further, while the internal consistency reliability and convergent validity of the questionnaire data in this study align with the standards, a larger sample size would improve the reliability and validity of the research results and better represent the overall work situation of contractors, owners and public policymakers.

The results provide insights into project governance research and have implications for construction practitioners in deploying governance-related resources.

This study investigates both direct and moderation effects of two dimensions of contract control and information technology governance on platform participants' financial performance.

Using data collected from 384 platform participants from China's two largest digital platforms, hierarchical regression is used to validate the conceptual model and hypotheses.

The empirical results show that contract completeness and information technology governance independently improved financial performance, while contract enforcement had an inverted U-shaped effect on financial performance. Furthermore, information technology governance amplified the positive effect of contract completeness, but not of contract enforcement, on financial performance.

This study advances the literature on partnership control by showing the interactive role of information technology governance and contract control. It also enriches research on information technology usage by revealing how information technology governance benefits business partnerships. Finally, it extends transaction cost theory by demonstrating that different dimensions of contracts have different effects on governing interfirm relationships.