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"Why Firms Make Unilateral Investments Specific to Other Firms: The Case of OEM Suppliers"
Min-Ping Kang, Joseph T. Mahoney, and Danchi Tan
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First Author :
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Min-Ping Kang
Communications Management
Associate Professor, Shih Hsin University
1, Lane 17, Muzha Rd., Sec. 1
Wenshan, Taipei 11623
Taiwan
886222368225 ext. 3316
886222360283 (Fax)
mpkang@cc.shu.edu.tw
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Second Author :
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Third Author :
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Danchi Tan
International Business
Associate Professor, National Chengchi University
64, Chih-nan Rd., Sec. 2
Wenshan, Taipei 11623
Taiwan
886229393091 ext. 81139
886229387699 (Fax)
dctan@nccu.edu.tw
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| Abstract : |
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| This paper examines why and under what conditions firms will make unilateral relationship- specific investments to serve their transaction partners. We propose that firms are more likely to make unilateral relationship-specific investments when the investment yields economic spillover values for other transactions with the same exchange partners as well as for third-party transactions. We also model two types of positive inter-project spillover effects that a transaction may generate: knowledge spillovers and reputation spillovers. We find empirical support for our developed theory in the context of Taiwanese suppliers of Original Equipment Manufacturers. |
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| Keywords : |
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| knowledge spillover, OEM, reputation spillover, Unilateral relationship-specific investment |
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| Manuscript Received :
2007
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| Manuscript Published :
2007
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