Beyond the Transaction-cost: An Evolutionary-Economics Framework of Analysis on the Supplier Dependence

This article claims theoretically that the supplier´s choosing security means to deal with the independence is a dynamic process in which there is an interaction between the external selection pressure and its own adaptive learning ability. So, the analysis on innovation is introduced into the theoretical system of transaction-cost economics. The risk with the supplier´s innovation dependence or lock-in is considered based on the classical routine-model set up by Nelson and Winter. With an eye to innovation, we argued that the border of a firm will not be instantaneously adjusted to conquer the routine lock-in, especially the higher-level routines lock-in, which restrains the supplier´s competence and competitive capability. Then an evolutionary-economics approach to the problem of supplier dependence beyond transaction-cost is put forward.