publication . Article . 2008

The Impact of Trust on the Mode of Transaction Governance between Manufacturer and Distributor: Evidence from Georgia

Open Access English
  • Published: 01 Nov 2008 Journal: Eurasian Journal of Business and Economics (issn: 1694-5948, eissn: 1694-5972, Copyright policy)
  • Publisher: Ala-Too International University
The goal of the paper is to explore main determinants of the mode of transaction governance between manufacturers and distributors. We examine a number of types of transaction governance, viz., markets, relational transacting, and hierarchies. The model proposed in the paper integrates the concept of trust with key dimensions of transaction cost economics, being estimated with data from a sample of Georgian manufacturing industries. The main finding of the study is that trust along with traditional dimensions of transaction cost economics has a significant impact on the choice of exchange governance mode
free text keywords: Georgia, trust, transaction costs, vertical integration, transactional relationships, Business, HF5001-6182
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McFadden. D.L. (1984) “Econometric Analysis of Qualitative Response Models.” in: Z. Griliches and M.D. Intriligator, eds., Handbook of Econometrics, Volume II, Ch. 24. pp. 1396- 1446. Elsevier Science Publishers BV, 1984.

Zucker, L.G. (1986) “Production of Trust: Institutional Sources of Economic Structure 1840- 1920.” Research in Organizational Behavior 8: 53-111.

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