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Governing local supplier opportunism in China: Moderating role of institutional forces
Author(s) -
Wang Mengyang,
Zhang Qiyuan,
Wang Yonggui,
Sheng Shibin
Publication year - 2016
Publication title -
journal of operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.649
H-Index - 191
eISSN - 1873-1317
pISSN - 0272-6963
DOI - 10.1016/j.jom.2016.07.001
Subject(s) - opportunism , business , china , industrial organization , microeconomics , economics , market economy , political science , law
China provides a vast and prominent manufacturing base, so curtailing its local supplier opportunism represents a primary concern for local and foreign buyers. Drawing on institutional theory, this study examines how regulatory uncertainty and relationship structure moderate the role of contracts and trust in restricting local supplier opportunism in China. An analysis of 293 buyer–supplier dyads in China reveals that contracts are more effective in deterring supplier opportunism when regulatory uncertainty is high. In addition, contracts help curtail opportunism more in domestic, compared with international, buyer–supplier relationships, whereas trust is more effective in restricting supplier opportunism in international relationships than in domestic ones.