Journal article

How much you know versus how well I know you: Selecting a supplier for a technically innovative component

G Hoetker

STRATEGIC MANAGEMENT JOURNAL | JOHN WILEY & SONS LTD | Published : 2005

Abstract

How do firms select a supplier for an innovative component? Three literatures speak to this question. Transaction cost economics focuses on the value of internalization, the literature on inter-firm relationships on the value of past relationships, and the firm capabilities literature on the value of superior capabilities. Choosing a supplier means choosing a bundle of these characteristics - internal vs. external, amount of prior transactions, and capabilities - but no study has integrated all three characteristics, making it impossible to understand the trade-offs involved either theoretically or managerially. I propose and test a model integrating all three factors, allowing us to underst..

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University of Melbourne Researchers