The impact of transaction specific investments on partnership performance

Abstract

Collaborating with partners in supply-chains is generally accepted as a critical success factor. In governance value analysis (GVA), it is assumed that undertaking transaction specific investments is a key enabler of innovation and improved competitive standing in the market. However, critics contend that GVA is not a theory that deals with innovation because the unit of analysis is the transaction between firms. By means of an empirical study in the seafood industry we provide some empirical support for the critics’ view. While undertaking transaction specific investments has efficiency benefits, no effectiveness gains were found in partnerships in the food supply-chain. These results suggest that while GVA is appropriate for explaining innovation in operational collaboration with the aim of achieving cost-efficient transactions between supply-chain partners, it is less able to explain innovation in strategic, problem-solving like, collaboration.