Asset specificity, intensity of coordination, and the choice of hybrid governance structures

Abstract

Purpose The purpose of this paper is to discuss the relationship between the existence of asset specificity and the architecture of the hybrid governance structures adopted by horticultural smallholders from the Brazilian region of Serra Fluminense. Design/methodology/approach This paper uses a negative binomial regression model to analyze 567 transactions carried out by horticultural smallholders from the Brazilian region of Serra Fluminense. Starting from the insights of Oliver Williamson’s transaction cost economics, an indicator is constructed with the goal to capture the degree of intensity of coordination from the adoption of diverse bundles of coordination mechanisms in a governance structure. Findings The results show that higher levels of human and physical asset specificity affect the intensity of coordination of the transactions in the sample, leading to the adoption of hybrid forms with more complex bundles of coordination mechanisms. Research limitations/implications This paper adds to a growing literature that studies the architecture of complex governance structures. However, its empirical conclusions are exploratory. Originality/value The contribution of this paper is twofold. First, quantitative empirical studies that analyze the diversity of hybrid forms in the same industry are relatively rare. This contribution also presents a theoretical discussion that might inform scholars dealing with similar research challenges.