Abstract
This paper’s objective was to analyze the role of transaction costs in the longevity of Jaú footwear supply chain. Firms are configured in a cluster, and their level of coordination was investigated. The study data was collected via conducting interviews with the cluster’s agents, making direct observations during the field visits, and consulting secondary data emerging both from document analysis and from sources such as newspapers, sectoral studies, and previous academic studies. The data point to the intense frequency of transactions among firms and the low uncertainty of internal transactions within the cluster due to the extensive exchange of information among agents. The bonds of competition and coordination that are established among the firms both reduce transaction costs and make them more competitive. Both human asset specificity and site specificity are important factors in the longevity of Jaú’s footwear cluster.DOI: 10.12660/joscmv7n2p140-153URL: http://dx.doi.org/10.12660/joscmv7n2p140-153
Highlights
Transaction cost economics is based on two behavioral assumptions: bounded rationality and opportunism
Transaction cost economics proposes that the variety of contractual relationships among businesses can be explained by differences in the dimensions of transactions
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Summary
Transaction cost economics is based on two behavioral assumptions: bounded rationality and opportunism. Economic agents are limitedly rational, so decisions are satisfactory but not optimal. This reasoning’s use of cognition is bounded. Opportunism refers to the fact that human beings are not entirely reliable, and contractual safeguards are necessary when establishing transactions between economic agents. These behavioral assumptions are the generators of transaction costs (Farina, Azevedo & Saes, 1997, Williamson, 1985, 1996). This work investigated a specific form of contractual relations among firms in the footwear supply chain of the Jaú cluster
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