Abstract
This article aims to study the influence of customer reference marketing on capital buying decisions in the context of firms with highly complex contractual frameworks. It presents the case of a thermoelectric power plant in which customer referencing did not influence a relevant buying decision. Evidence suggests that the implicit governance mechanism of project financing nullified the referencing effect. Project finance restricts managerial discretion over free cash flow, which influences organizational buying behaviour at the level of capital equipment goods. This research identifies the presence of this singular kind of governance system and draws managerial consequences for suppliers who wish to sell to project firms. A clear understanding of the legal and contractual framework can help suppliers to fulfil the potential customer’s needs and expectations.
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