Human asset specificity, physical asset specificity, and direct distribution

Abstract

This study (1) distinguishes between the effects on direct distribution of two distinctive dimensions of asset specificity (human asset specificity and physical asset specificity); (2) explores the sensitivity of these two relationships to variations in industry type (B2B versus B2C); and (3) compares the strength of these two relationships within B2B markets. In addition, we compare the sensitivity of firm decisions regarding human and physical asset specificity to firm variations in product complexity.The empirical analysis is based on data collected from Japanese manufacturers operating in B2B (n = 451) and B2C (n = 238) markets. Our results indicate that the level of physical asset specificity is positively and significantly related with the level of direct distribution in both B2B and B2C markets in Japan. In contrast, the level of human asset specificity is positively and significantly related with the level of direct distribution only in Japanese B2B markets. However, within those markets human asset specificity has a relatively larger effect, relative to physical asset specificity, on direct distribution. Given these findings, in future studies scholars should test for the appropriateness of combining items that measure human and physical asset specificity into an aggregate measure of asset specificity.