Essays on the governance of buyer-supplier relationships

In this thesis we challenge the way governance structures associated with hybrid vertical interfirm relationships are conceptualized in received transaction cost economics (TCE). We argue that a more dynamic approach is needed, in which preferences and knowledge are not treated as fixed and given, but rather develop over time. Accordingly, the value of a transaction relation may lay not only (and perhaps not primarily) in satisfying wants according to present preferences and knowledge, but also (and perhaps primarily) in developing new preferences, perceptions and understanding. In this view relationships evolve through a process of cumulative causation and different contingencies are likely to lead to different configurations of governance. Our results indicate that the perception of dependence is not only influenced by the level of asset specificity and safeguards (as advocated in TCE), but also by factors excluded from received TCE. It endorses our suggestion that the perceptions of the parties involved have to be included in the analysis. Based on our findings we identify trust as an additional source of governance. Our results confirm that joint value creation is conditioned by the explorative and exploitative capabilities of the buyer-supplier relationship. We find idiosyncratic resources and relational norms to be among the drivers that positively affect these capabilities. From these observations we conclude that too much focus on asset specificity as a potential source of opportunism, while neglecting the beneficial governance and value-adding properties of trust, works counter-productively in a study of hybrid vertical interfirm relationships