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This chapter analyzes the efficiency levels of a circular economy (CE) with an emphasis on transaction costs. It examines the governance aspect of CE activities in comparison to the predominant linear value creation. Extant CE research in business studies tends to be descriptive and lacks a theoretical foundation, particularly in understanding CE management. Transaction cost theory explains efficiency in economic organizing, lending itself to the study of arrangements that maximize resource efficiency at continued economic virtue. The conceptualization proposes that CE transaction costs are greater than those within the linear economy (LE), primarily due to the uncertainties about reciprocal dependencies, looping material complexities, exchanging novel information, and increased contracting efforts. Geographically bounded and institutionally homogeneous CE initiatives may curb these rising costs. By bringing efficiency concerns into CE analysis, the chapter demonstrates the applicability of transaction cost theory and highlights CE relevance to international business by pointing out spatial choice implications.

The paper provides a detailed historical account of Douglass C. North's early intellectual contributions and analytical developments in pursuing a Grand Theory for why some countries are rich and others poor.

The author approaches the discussion using a theoretical and historical reconstruction based on published and unpublished materials.

The systematic, continuous and profound attempt to answer the Smithian social coordination problem shaped North's journey from being a young serious Marxist to becoming one of the founders of New Institutional Economics. In the process, he was converted in the early 1950s into a rigid neoclassical economist, being one of the leaders in promoting New Economic History. The success of the cliometric revolution exposed the frailties of the movement itself, namely, the limitations of neoclassical economic theory to explain economic growth and social change. Incorporating transaction costs, the institutional framework in which property rights and contracts are measured, defined and enforced assumes a prominent role in explaining economic performance.

In the early 1970s, North adopted a naive theory of institutions and property rights still grounded in neoclassical assumptions. Institutional and organizational analysis is modeled as a social maximizing efficient equilibrium outcome. However, the increasing tension between the neoclassical theoretical apparatus and its failure to account for contrasting political and institutional structures, diverging economic paths and social change propelled the modification of its assumptions and progressive conceptual innovation. In the later 1970s and early 1980s, North abandoned the efficiency view and gradually became more critical of the objective rationality postulate. In this intellectual movement, North's avant-garde research program contributed significantly to the creation of New Institutional Economics.

This study which is positioned in the ambit of control research investigates the impact of ex ante contractual completeness on opportunistic behaviors and ex post transaction costs, while assessing how these affect relationship termination intention. This study aims to examine alternative attractiveness as a necessary moderator of the nexus between transaction cost and relationship termination intention.

Data gathered from 211 companies in South Korea that have installed and run outsourced vending machines are analyzed and used to validate the study’s theoretical and empirical contributions.

The findings, which rely only on data from companies that outsource and those that run outsourced vending machines, show that contractual completeness negatively affects both active and passive opportunism. The study also discovers that active opportunism positively affects both bargaining costs and monitoring costs, whereas passive opportunism has a positive and direct effect on maladaptation costs but a negative effect on monitoring costs. It further finds that both bargaining and maladaptation costs have positive and direct effects on relationship termination intention, while monitoring costs have a negative effect on the same. Furthermore, it is observed that alternative attractiveness moderates the relationships between bargaining costs and relationship termination intention, as well as maladaptation costs and relationship termination intention.

This study demonstrates that contractual completeness can serve as an important ex ante control mechanism, whereas the two types of opportunism can raise transaction costs. Furthermore, alternative attractiveness is identified as a driver of the impact of transaction costs on relationship termination intention.

A key point of the departure of this study is that it examines the moderating role of alternative attractiveness in the relationship between transaction cost and relationship termination intention. The paper also advances the control literature by emphasizing the critical role that contractual completeness plays in reducing the occurrence of (both active and passive) opportunism in business relationships (especially companies that outsource).

This paper aims to determine new-normal uncertainty considerations stemming from the COVID-19 pandemic to consider within transaction-cost analysis for pharmaceuticals. It also aims to propose new-normal market entry strategies to address the uncertainty as a result of COVID-19's implications and provide for lack of knowledge and information in an uncertain business environment by way of Internet of Things (IoT) ecosystem for pharmaceutical market entry.

In this paper, we focus on the uncertainty facet within transaction-cost analysis consideration and utilise a descriptive three-case study approach taking in Johnson and Johnson (J&J), GlaxoSmithKline (GSK) and Novartis to present an ADO (Antecedent-Decisions-Outcomes) understanding of their usual market entry approach, the approach undertaken during the pandemic and the outcomes thereafter facilitating new-normal uncertainty considerations to factor in. Further with this insight, we develop a conceptual framework addressing the transaction-cost analysis implications of uncertainties toward lack of knowledge and information for a new-normal market entry approach and operating strategy for pharmaceuticals applicable due to IoT (Internet of Things).

Uncertainty (external and internal) is different now in the new-normal business environment for pharmaceuticals and boils down to acute shortage of knowledge and information impact to make an appropriately informed decision. Therefore, considering the changed factors to consider, pharmaceuticals need to be able to undertake market entry with vaccines and medicines by way of IoT thereby enabling, the filling of the gap via real-time data access and sharing, including enhancing predictive analysis for sustenance.

The paper's findings have many theoretical implications highlighted in the manuscript.

The paper's findings have many practical implications highlighted in the manuscript.

This is the first study to our knowledge that throws light on transaction-cost analysis theory's uncertainty facet for pharmaceuticals. It is also the first study that provides a new-normal market entry strategy for pharmaceutical companies built on interoperability of real-time IoT.

Warehouse receipt-based financing (WRF), an innovative instrument with its structure embedded in the agricultural value chain can potentially address farmers' concerns about timely credit access and accessible remunerative markets. However, studies indicate farmers' exclusion from currently practiced WRF mechanisms across developing countries. Transaction cost and lack of assured remunerative markets post storage are the challenges thwarting farmers' participation. The study explores how these challenges can be addressed by analyzing a case study. The finding will help in coming up with a farmer-inclusive WRF mechanism.

The study uses a case study as an analysis tool. Primary data is gathered through farmers. Descriptive statistics and partial least squares (PLS) approach to structural equation modeling methodology has been adopted for empirical testing of the hypothesis of the study. The study uses SMART PLS 3.0 for analysis of data.

Single window offering of multiple value chain operations and technological intervention in physical handling substantially reduces transaction costs for farmers. Sustained farmers' participation in the case supports this finding. The presence of an assured market (PAM) is found to have a positive and significant relationship with WRF in the case of beneficiary farmers. The PAM is found to have a negative yet significant relationship with WRF in the case of nonbeneficiary farmers. Critical success factors of the entity KisanMitra stated in the case substantiates a farmer-inclusive WRF mechanism.

The study analyzes a case study of specific geography. However, similarities enlisted across developing countries in the introduction section provide a scope of generalization of findings across developing countries. The identified factors for a farmer-inclusive WRF mechanism will enable the governments, policymakers and development institutions to ascertain and align their WRF implementation measures to inculcate and upgrade these factors to the prospective WRF agents. Future studies can explore the replication of farmer-inclusive WRF mechanisms across other geographies. The studies also explores the role of technological interventions in further reducing the transaction cost and suitable policy modifications to encourage replication of the study in other geopgraphical context.

The study on WRF and the methodology adopted is first of its kind to identify factors for a farmer-inclusive WRF mechanism.

The understanding of how to mitigate opportunism in construction projects is still limited and conflicting. The complexity of causalities and interdependence among antecedents of opportunism (transaction characteristics and governance mechanisms) is the major obstacle to current research. This study takes a holistic perspective to explore the different combinations of conditions that lead to high opportunism and low opportunism in project management.

Through 2 phases of the interview and questionnaire survey, the 91 valid survey data were collected from the buyer–seller relationships in construction projects and analyzed by adopting fuzzy-set qualitative comparative analysis.

A single transaction characteristic is rarely sufficient to explain opportunism, and combinations of different transaction characteristics and governance mechanisms (performance ambiguity, asset specificity, buyer's requirement certainty, informal control, and formal control) have different effects on opportunism. In the case of extremely unsatisfactory transaction characteristics, even the combination of formal and informal control cannot prevent high opportunism. The combination including low-formal control and high-asset specificity easily leads to high opportunism. Besides, performance ambiguity is a vital factor in mitigating high opportunism or achieving low opportunism.

Previous studies have always addressed the role of one or some factors independently and separately. This study is one of the first to explore the different combinations of conditions that result in high opportunism and low opportunism in project management based on transaction costs economics and agency theory.

This study analyzes the performance implications of adopting blockchain to support supply chain business processes. The technology holds as many promises as implementation challenges, so interest in its impact on operational performance has grown steadily over the last few years.

Drawing on transaction cost economics and the contingency theory, we built a set of hypotheses. These were tested through a long-term event study and an ordinary least squares regression involving 130 adopters listed in North America.

Compared with the control sample, adopters displayed significant abnormal performance in terms of labor productivity, operating cycle and profitability, whereas sales appeared unaffected. Firms in regulated settings and closer to the end customer showed more positive effects. Neither industry-level competition nor the early involvement of a project partner emerged as relevant contextual factors.

This research presents the first extensive analysis of operational performance based on objective measures. In contrast to previous studies and theoretical predictions, the results indicate that blockchain adoption is not associated with sales improvement. This can be explained considering that secure data storage and sharing do not guarantee the factual credibility of recorded data, which needs to be proved to customers in alternative ways. Conversely, improvements in other operational performance dimensions confirm that blockchain can support inter-organizational transactions more efficiently. The results are relevant in times when, following hype, there are signs of disengagement with the technology.

This study aims to focus on the supply chain (SC) cost drivers of healthcare industries in the USA, as SC costs have increased 40% over the last decade. The second-most significant expense, the SC, accounts for 38% of total expenses in a typical hospital, while most other industries can operate within 10% of their operating cost. This makes healthcare centers supply-chain-sensitive organizations with limited facilities for high-quality healthcare services. As the cost drivers of healthcare SC are almost unknown to managers, their jobs become more complex.

Guided by pragmatism and positivism paradigms, a cross-sectional study has been designed using quantitative and deductive approaches. Both primary and secondary data were used. Primary data were collected from health centers across the country, and secondary data were from healthcare-related databases. This study examined the attributes that explain the most significant variation in each contributing factor. With multiple regression analysis for predicting cost and Student's t-tests for the significance of contributing factors, the authors of this study examined different theories, including the market-based view and five-forces, network and transaction cost analysis.

This study revealed that supply, materials and services represent the most significant expenses in primary care. Supply-chain cost breakdown results in four critical factors: facility, inventory, information and transportation.

This study examined the data from primary and secondary care institutions. Tertiary and quaternary care systems were not included. Although tertiary and quaternary care systems represent a small portion of the healthcare system, future research should address the supply chain costs of highly specialized organizations.

This study suggests methods that can help to improve supply chain operations in healthcare organizations worldwide.

This study presents an empirically proven methodology for testing the statistical significance of the primary factors contributing to healthcare supply chain costs. The results of this study may lead to positive policy changes to improve healthcare organizations' efficiency and increase access to high-quality healthcare.

Firms aiming to enhance firm performance require specific investment and qualification of capability. However, the relationship between these factors and firm performance is influenced by boundary conditions. This study focuses on the role of shared values as a governance mechanism in moderating the relationship between specific investment, qualification of capability, and firm performance.

Drawing on transaction cost analysis, the authors develop a theoretical model to explore how shared values moderate the relationship between specific investment, qualification of capability, and firm performance. The authors collected data from 156 firms in Cote d’Ivoire, resulting in a sample of 216 observations. The authors employed hierarchical regression analysis and the “pick-a-point approach” to examine how specific investment and qualification of capability impact firm performance at different levels of shared values.

The results indicate that specific investment and qualification of capability have a partially positive impact on firm performance. Interestingly, shared values are an important moderating variable, acting as a boundary condition that affects the relationship between specific investment, qualification of capability, and firm performance. Specifically, specific investment leads to excellent firm performance only when shared values are not sufficiently high, whereas qualification of capability leads to superior firm performance only when shared values are sufficiently high.

This study has three research implications. First, this study enriches TCA literature by identifying shared values as a boundary condition and examining the moderating role of shared values. Second, the study findings discover new insights into how specific investment and qualification of capability enhance or inhabit organizational performance at different levels of shared values. Third, this study extends the existing research and reveals the specific conditions for positive or negative relationships between specific investment and organizational performance and qualification of capability and organizational performance.

First, compared to specific investment, qualification of capability has greater effect on organizational performance. Second, when considering whether to increase specific investment or/and improve qualification of capability, executives are encouraged to first evaluate their firm's level of shared values and then make appropriate strategic decision accordingly. Third, six tactics are recommended for enhancing shared values.

This study enriches the literature on transaction cost analysis and contributes to understanding the moderating role of shared values. The findings shed light on the specific investment, qualification of capability, and firm performance relationships. Additionally, this research highlights the importance of considering shared values as a boundary condition in examining these relationships.

A successful relationship between manufacturer and supplier is vital for the pursuit of mutual benefits, which can be affected by one of the partners’ opportunistic behavior, causing disequilibrium in the existing relationship. The extant research has mainly focused on opportunism as a single phenomenon rather than the detectable strong form and unnoticeable weak form of opportunistic behavior in an exchange relationship that affects the relational outcomes in various ways. This study aims to contribute toward explaining the effect of economic and social forces on a strong and a weak form of opportunism and, in turn, its impact on relational outcomes in manufacturer-supplier relationships.

A sample of 361 manufacturers was drawn randomly using a sampling frame from the western part of India. The authors used covariance-based structural equation modeling to support the proposed model empirically. The authors examined the effect of social capital and transaction cost dimensions on different forms of a supplier’s opportunism.

All three dimensions of social capital have a different impact on both the forms of a supplier’s opportunism in the relationship. The authors found that social capital moderates the relationship between transaction-specific investments on a weak form of opportunism, while social capital is more valuable in curbing opportunism due to the effect of environmental uncertainty and behavioral uncertainty. The authors found that the supplier’s weak form of opportunism than the strong form has a more amplifying effect on governance costs.

This research contributes in three different ways. First, it inquires about the direct effect of transaction cost dimensions and social capital dimensions on a supplier’s multifaceted opportunism (strong form and weak form) in the manufacturer-supplier relationship. Second, it investigates the moderating effect of social capital on the relationship between transaction cost dimensions and forms of supplier opportunism. Third, the weak form of a supplier’s opportunism affects more significantly than the strong form of opportunism on governance costs.