Moderator Effect Of Structural Factors On The Performance Of Contract And Relational Governance

Traditional inter-firm governance researches pay much attention to dyadic-level factors but ignore the influence network where one specific exchange embedded in. In this paper, we conclude that the future directions of inter-firm governance research are:(1) shifting the basic analytic unit from "transaction" to "relation", to learn the rich social contents behind ordinary economic transaction and inter-firm governance activities;(2)moving research perspective from "dyadic-level" to "network-level", to study the network influence on inter-firm governance mechanism;(3)researching the moderator effect on inter-firm mechanism, to understand the complex influences of various factors on inter-firm governance mechanism.Drawing from the social network theory, we analyze how structural factors (structural embeddednsss of dyadic transaction relationship and network centrality of transaction partner) moderate the performance (opportunism inhibition) of the most common two inter-firm governance mechanisms (contract governance and relational governance). We maintain that the moderator effect types of structural embeddedness depend on whether we take the governance effect of structural embeddedness per se into account. Structural embedednss negatively moderates performance of dyadic governance mechanisms, if we deny its governance effect; and vice versa. According to the data from237firms, we find that structural embeddedness per se does have governance function, illustrating the negative moderator effects of structural embeddedness on performances of contract and relational governance, and that network centrality positively moderates the performance of relational governance but has no significant effect on performance of contract governance. We define the governance function of structural embeddedness as "structure-based relational governance", offering some insights to future research on inter-firm governance.