Relational contracts and global sourcing

• 成果类型: Article
• 署名作者: Kukharskyy, Bohdan
• 署名单位: Eberhard Karls University of Tubingen
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2016.04.002
• 发表日期: 2016
• 页码: 123-147
• 关键词: Relational contracts; Long-term orientation; International make-or-buy decision

摘要

Relational contracts - informal agreements sustained by the value of future relationships - are integral parts of global production processes. This paper develops a repeated-game model of global sourcing in which final good producers decide whether to engage with their suppliers in relational contracting and whether to integrate a supplier into a firm's boundaries or deal with the latter at arm's-length. The model predicts that the relative prevalence of vertical integration increases in the long-term orientation of the headquarters' and suppliers' managers. It further suggests that the share of a foreign subsidiary owned by a final good producer increases in the headquarters' long-term orientation. Combining industry-level data from the U.S. Census Bureau's Related Party Trade database with measures for long-term orientation from Hofstede et al. (2010) and the World Management Survey, I find empirical evidence supportive of the positive link between the long-term orientation of cooperation parties and the relative prevalence of vertical integration. Using information on managerial composition of firms and ownership stakes from the Bureau van Dijk's Orbis database, I find that firms led by long-term oriented managers own higher shares of their foreign subsidiaries. (C) 2016 Elsevier B.V. All rights reserved.