Can a supplier benefit from investing in transaction-specific investments? A multilevel model of the value co-creation ecosystem perspective

Abstract

Purpose This paper aims to build and empirically test a multilevel framework integrating transaction cost economics and a resource-based view into a value co-creation ecosystem perspective to explain the chain- and firm-level effects of transaction-specific investments (TSIs) on supplier performance. Design/methodology/approach This paper investigates cross-level network effects using survey data from the List of Taiwanese Central Satellite Production Systems. A total of 34 buyers (hub firms) and 106 suppliers (satellite firms) from 34 supply chains responded to the survey. Findings Findings confirm that individual firms’ TSIs can foster co-specificity at the supply chain level, thereby improving supply chain integration (SCI). SCI can have a positive cross-level moderating effect on the TSI–performance relationship. Research limitations/implications These two key concepts, value co-creation and co-specificity, extend the theoretical application of transaction cost theory and the resource-based view to cross-level study by contributing to the research on the TSI–performance relationship. Practical implications This study’s framework is a counter to the buyer–supplier–supplier relationships in which each actor who may have different goals can create value jointly and share benefits from their TSIs. Social implications Owing to high co-specificity, being embedded in a well-integrated supply chain can be a threat when the environment is turbulent; for losing strategic flexibility, co-specificity and embeddedness may result in a collective adaptation concern. High degrees of SCI may slow the reaction to environmental turbulence for both buyers and suppliers. Originality/value Individual firms’ TSIs can foster co-specificity at the supply chain level, subsequently enhancing SCI. An integrated supply chain can be a collective asset that facilitates value co-creation. Individual firms can benefit from the sharing of collective value. SCI can also increase switching costs, thus reducing the likelihood of individual firm engaging in opportunistic behavior and cost safeguarding.

Supply chain integration and halal frozen meat product returns

“…Based on the previous argument, fairness is essentially a significant social preference, which indicates that decision-makers (sellers) consider the ultimate end of individual commercial partnerships and the relationship outcome of the distribution channel (Zhang et al , 2020). Relationships between buyers (receivers of justice) and sellers (givers of justice) provide social elements that influence attitudinal and behavioural reactions in addition to economic transactions (Huang et al , 2020; Zhou et al , 2020). Previous studies highlighted the importance of fairness in organisational contexts from a giver of justice viewpoint, such as teams, mergers and acquisitions and, notably, supply chain relationships (Fernando and Wulansari, 2021; Laundon et al , 2019).…”

How do keystones govern their business ecosystems through resource orchestration?

“…Adner (2006) pointed out that resource sharing can help keystones overcome their own critical bottlenecks. Huang et al (2020) also proposed that resource sharing can promote the co-creation of value within the ecosystem. Resource sharing is not only beneficial to keystones but also helps niches to obtain keystones' resources (Suh and Sohn, 2015) to influence the emergence of new markets and integration types (vertical or horizontal) (Galateanu and Avasilcai, 2016).…”

“…Adner (2006) pointed out that resource sharing can help keystones overcome their own critical bottlenecks. Huang et al. (2020) also proposed that resource sharing can promote the co-creation of value within the ecosystem.…”

“…Stakeholders within the business ecosystem collaborate with each other to obtain complementary resources (Moore, 1993), and keystones further promote collaboration among stakeholders through resource sharing (Wulf and Butel, 2017). Some scholars further pointed out in their research that resource sharing can support the development of complementors (Mukhopadhyay and Bouwman, 2019), attract complementors (Mukhopadhyay and Bouwman, 2019), acquire complementary innovation (Ander, 2006), and realize value co-creation (Babu et al, 2020;Huang et al, 2020). However, two issues remain unclear.…”

“…Some scholars further pointed out in their research that resource sharing can support the development of complementors (Mukhopadhyay and Bouwman, 2019), attract complementors (Mukhopadhyay and Bouwman, 2019), acquire complementary innovation (Adner, 2006), and realize value co-creation (Babu et al. , 2020; Huang et al. , 2020).…”