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Wednesday, April 26 • 2:20pm - 2:40pm
Contracted Services: Governance Choice Within Transaction Costs Economics

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In this study, I use 92 contracts governing the relationships between vendors supplying AT&T with call center services and AT&T to test the central prediction of Transaction Cost Theory which states that the variation of degree to which transaction-specific investments are associated with individual production relationships is influenced by the nature of the contracts that are associated with the relationships in predictable ways. Testing begins by identifying the degree of specificity of the assets associated with each of the 92 relationships. Governance attributes of each contract are assessed using scales that range from what theory predicts we would see used in a standard market to what we would expect to see from a flexible, long-term relationship. Using tables with rows representing the numbers of each of the 92 contracts characterized by the degree of specificity of the assets associated with them (low, medium, and high idiosyncrasy) and the columns representing the numbers of each of the 92 contracts characterized by their governance attributes (market, mixed, relational). Theory predicts that the number of contracts in each cell will follow a pattern, with the cells at the intersections most common. Finally, this prediction is tested using an analysis of Chi-Square test of the contingency tables.

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Wednesday April 26, 2017 2:20pm - 2:40pm
035 Karpen Hall