Transaction cost perspectives on alliances and joint ventures: explanatory power and empirical limitations

Abstract

Transaction cost economics (TCE) has been extensively applied by international business scholars to analyze joint ventures and strategic alliances. It provides a theoretical basis to analyze how firms organize their transactions with other firms, and hence their choices of governance structures, for example between JVs and other organizational forms. However, TCE has also been frequently critiqued and empirical findings on some of the constructs derived from TCE find inconsistent results. This chapter critically evaluates the TCE literature on cross-border business activity to evaluate to what extent this empirical literature actually allows to support or refute TCE-based arguments, and to provide directions for future work research. We identify four major challenges: 1) The level of analysis used to proxy transaction costs, 2) contextual drivers of transaction costs, especially in emerging economies, 3) theoretical ambiguity of TCE arguments with respect to distance and experience, and 4) the assumption that JVs are a flexible (low risk) mode of operation. This discussion leads to suggestions how to design empirical research more consistent with the statements of the theory.

The Economic in International Islamic Education Strategy Collaboration: A Rapid Review

“…A fast review is a methodology accustomed describe the implications of the synthesis from numerous sorts of literature, anywhere the implications of the synthesis rectangular degree anticipated to help positive events in growing decisions [12]. This methodology square measure frequently aforesaid to be a changed form of systematic assessment that creates it ability to place operative it in abundant less time and use abundant less literature [13], than scientific assessment. moreover [14], named that changes rectangular degree generally created to gift approaches of the systematic assessment methodology in accomplishing fast reviews, a number of that rectangular degree English-most effective literature, ignoring grey literature, limiting literature get reassets, and utterly relating to one individual to settle on out literature or extract experience.…”

COVID-19 Pandemic and Small-Scale Industries in a Local Geographic Space of Nigeria: An Assessment of the Impact of Strategic Interfirm Alliance

“…Strategic interfirm alliance has also been attributed to competitive advantage (Hung et al, 2015; Talebi et al, 2017; Zhao, 2014), transaction cost reduction (Brouthers, 2013; Geyskens et al, 2006; Meyer & Wang, 2004; Tihanyi et al, 2005), social capital (Ireland et al, 2002, as cited in Talebi et al, 2017), new opportunities (Joshi & Dixit, 2014 as cited in Talebi et al, 2017; Yang et al, 2014), and firm performance (Junaidu et al, 2019; Kim, 2015; Nwokocha & Madu, 2020; Talebi et al, 2017). Consequently, the background thus far has shown that strategic interfirm alliance enables firms and industries including SSIs to adapt and withstand economic challenges.…”

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“…We know that alliance governance is affected by opportunism hazards (e.g. Poppo and Zenger, 2002;Meyer and Wang, 2015). Misaligned governance in alliances could be a source of problems that negatively impact alliance performance (Sampson, 2004).…”