Application of Transaction Cost Theory on Repurchase Intention

Chen, Lishan

doi:10.2991/icoi-17.2017.55

Cited by 1 publication

(1 citation statement)

References 17 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The transaction cost theory is the dominant theory for explaining the ownership structure. The theory explains governance frameworks that are based on internal and external transaction costs that differ from market prices or exchanged products (Chen, 2021; Rindfleisch, 2019; North, 1990; Dahlstorm and Nygaard, 1999). Transaction costs are the costs incurred by dealing with another external party to perform any exchange activities and controlling such transactions.…”

Section: Theoretical Framework and Literature Reviewmentioning

confidence: 99%

Effects of contractual completeness on opportunistic behaviors, multilevel transaction costs and relationship termination intention: the moderating effect of alternative attractiveness

Lee

Amenuvor

2023

EJM

View full text Add to dashboard Cite

Purpose 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. Design/methodology/approach 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. Findings 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. Practical implications 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. Originality/value 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).

show abstract