Empirical study on governance mode of supply chain

In the past two decades, supply chain cooperation has emerged rapidly and formed the important source of corporate competitive advantages. By using the survey of supply chain alliances, and by combining transaction cost economics (TCE) and relational contract theory (RCT), the authors analyze governance modes of supply chain as well as their influencing factors. First, the authors analyze the risk rising from supply chain transaction, and develop several basic theoretical hypotheses on governance mode choice of supply chain. Then by using the survey data of 159 supply chain alliances in China and by applying logit model, the authors empirically test the hypotheses. The emperical results show that asset specialty, uncertainty and relationship are critical factors that influence governance mode of supply chain. With the increase of asset specificity, uncertainty (or complexity) surrounding the transaction, partners are more likely to choose equity governance mode; whereas firms with prior ties or long cooperative history are more likely to choose non-equity governance mode. Finally, the authors discuss the empirical results and propose some suggestion for future research.