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Contract formalization and governance of exporter-importer relationships

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Aulakh, Preet S.

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Exporting relationships between manufacturers and foreign importers pose unique coordination problems because, on the one hand, transactions are recurrent and both firms make non-trivial relationship-specific investments, but at the same time, the exchange partners maintain separate legal entities with individual profit claims. This study examines the role of contracts as a governance mechanism in these relationships that are neither market-based discrete transactions, nor can be governed through ownership-based hierarchies. Drawing upon recent research on contract law and interorganizational relationships, we develop and empirically test a model that incorporates both the antecedents and performance implications of the nature of contract governing exporter-importer relationships.

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Wiley

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Business, Management

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Journal of Management Studies

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10.1111/j.1467-6486.2007.00746.x

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