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Uncertainty in the transaction environment: an empirical test
Author(s) -
Sutcliffe Kathleen M.,
Zaheer Akbar
Publication year - 1998
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/(sici)1097-0266(199801)19:1<1::aid-smj938>3.0.co;2-5
Subject(s) - vertical integration , transaction cost , database transaction , differential (mechanical device) , test (biology) , set (abstract data type) , empirical research , econometrics , industrial organization , economics , microeconomics , positive economics , computer science , statistics , mathematics , engineering , paleontology , biology , programming language , aerospace engineering
Previous studies examining the relationship between uncertainty and vertical integration have produced a conflicting set of results. To clarify this puzzle we drew on the literature to conceptualize three distinct forms of uncertainty—primary, competitive, and supplier—and hypothesized that each had a different effect on vertical integration. The hypotheses were tested using experimental data collected from 308 managers. Consistent with our prediction of differential effects, we found that primary and competitive uncertainty were negatively associated with the decision to vertically integrate, but supplier uncertainty was positively related to the vertical integration decision. No interaction effects were found. Implications for theory and research are suggested. © 1998 John Wiley & Sons, Ltd.