This work examines contractual governance in international buyer–supplier relationships by investigating the linkages between contract specificity, contract violation, and relationship performance as well as the roles of contract monitoring and a country's institutional factors (i.e., country business risk and country globalization). The findings, based on a survey of international buyer–supplier relationships, provide new insights into a contract specificity → contract violation → relationship performance model. For example, the results indicate that contract specificity is not directly related to contract violation but, rather, that country-level factors moderate the effectiveness of contract specificity (i.e., contract specificity is more effective in suppressing an international buyer's contract violation if the buyer is from a country characterized by low business risk or high country globalization). The results also demonstrate that contract monitoring can mitigate the negative association between contract violation and relationship performance.

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