Effect of Transaction Cost and Coordination Mechanisms on the Length of the Supply Chain

A drastic reduction in the cost of transmitting information has tremendously increased the °ow and availability of information. Greater availability of information increases the rm’s ability to manage its supply chain and, therefore, increases its operational performance. However, current literature is ambiguous about whether increased information °ows leads to either a reduction or increase in transaction cost, which enable supply chains to migrate towards more market-based transactions or hierarchal-based transactions. This research empirically demonstrates that the governance structure of the supply chains changes…

Author: Iyengar, Deepak

Source: University of Maryland

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