Exchange hazards, relational reliability, and contracts in China: The contingent role of legal enforceability

Volume: 41, Issue: 5, Pages: 861 - 881
Published: Apr 1, 2010
Abstract
Building on institutional and transaction cost economics, this article proposes that legal enforceability increases the use of contract over relational reliability (e.g., beliefs that the other party acts in a non-opportunistic manner) to safeguard market exchanges characterized by non-trivial hazards. The results of 399 buyer–supplier exchanges in China show that: (1) when managers perceive that the legal system can protect their firm's...
Paper Details
Title
Exchange hazards, relational reliability, and contracts in China: The contingent role of legal enforceability
Published Date
Apr 1, 2010
Volume
41
Issue
5
Pages
861 - 881
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