Competition and trust : evidence from German car manufacturers

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URL:	https://madoc.bib.uni-mannheim.de/29940
URN:	urn:nbn:de:bsz:180-madoc-299400
Document Type:	Working paper
Year of publication:	2011
Place of publication:	Mannheim
Publication language:	English
Institution:	Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series:	Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject:	330 Economics
Classification:	JEL: D86 , D22 , L22 , L62,
Subject headings (SWD):	Deutschland , Kraftfahrzeugindustrie , Kraftfahrzeugzulieferer , Lieferanten-Kunden-Beziehung , Vertrauen , Sunk Costs , Wettbewerb , Beschaffungsplanung
Keywords (English):	Trust , hold-up problem , competition , specific investment , suppliers , car manufacturers , German automotive industry
Abstract:	We explore the determinants and effects of trust relationships between upstream suppliers and downstream producers. Using unique survey data on individual supplier-buyer relationships in the German automotive industry, we show, by means of different measures of supplier-buyer trust, that higher levels of trust mitigate relationship-specific underinvestment in a classical hold-up situation. Moreover, contrary to the extant literature, we show that higher levels of supplier's trust are re ected in the buyer's choice of a more competitive procurement strategy among potential suppliers.

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BASE: Felli, Leonardo ; Koenen, Johannes ; Stahl, Konrad

Google Scholar: Felli, Leonardo ; Koenen, Johannes ; Stahl, Konrad

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