Formal governance, interfirm coordination, and performance in partnerships: An empirical investigation of a mediation model

Young Rok Choi, Phillip H. Phan, Jaepil Choi

Research output: Contribution to journalArticlepeer-review

Abstract

This study investigates the extent to which formal governance mechanisms such as contracts and equity ownership affect interfirm coordination and partnership performance. We analysed data from a survey of 301 Korean firms to show that interfirm coordination partially mediates the relationship between contract completeness, defined as the extent to which a contract specifies task operations and contingencies, and partnership performance. Furthermore, we find that more complete contracts can attenuate the negative effects of equity ownership on coordination, and that this effect is particularly strong when partner tasks are interdependent and relational norms are weak.

Original languageEnglish (US)
Pages (from-to)413-424
Number of pages12
JournalEuropean Management Journal
Volume38
Issue number3
DOIs
StatePublished - Jun 2020

Keywords

  • Contracts
  • Coordination
  • Equity ownership
  • Formal control
  • Interfirm partnerships
  • Partnership performance

ASJC Scopus subject areas

  • Strategy and Management

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