Buyer Perceived Opportunism, Contracts and Vertical Coordination

Large part of Transaction cost analysis (TCA) literature has emerged from developed economies with most studies centred around large manufacturing firms. Verifying practical validity of TCA to firms in developing or emerging markets require research using firms from these markets. This study introduces a different context for re-examining TCA predictions (using firms from an emerging market). Survey was conducted using Tanzanian firms engaging in producer- distributor business relations representing supplier and buyer firms respectively.Most tested relations did not reveal significant differences between developed and emerging markets (insignificant effect of firms and countries differences) except for insignificant impact of environmental uncertainty on vertical coordination. These preliminary findings suggest relevance of TCA predictions to both developed and emerging markets. Further studies need to involve more countries as well as different set of relations so as to improve validity of these findings.