Does asset specificity lead to value expropriation or value creation? An Institutional View

Abstract

Purpose

Asset specificity is a focal feature of buyer–supplier exchanges; however, whether unilateral asset specificity encourages opportunistic value expropriation or promotes trust-based value creation remains controversial. The purpose of this paper is to investigate how institutional forces shape the controversial roles of buyer asset specificity in supply chain relationships.

Design/methodology/approach

With a survey of 217 matched manufacturer–supplier dyads in China, the study adopts ordinary least squares regression analyses to test hypotheses.

Findings

The results show that two key institutional forces, guanxi importance and government intervention, play different roles in shaping the value expropriation and value creation roles of buyer asset specificity. As an informal institutional force, guanxi importance weakens the impact of buyer asset specificity on opportunistic value expropriation and facilitates trust-based value creation. Moreover, as a formal institutional force, government intervention amplifies the effect of buyer asset specificity on opportunism but strengthens its connection with trust.

Originality/value

By incorporating an institutional view to investigate how institutional forces affect this “valuable but vulnerable” dilemma of asset specificity, this study reconciles the controversy concerning value expropriation vs value creation and enriches understanding of the critical roles of institutional parameters in supply chain management.

Citation

Zhang, Q., Wang, M. and Zhao, Z. (2022), "Does asset specificity lead to value expropriation or value creation? An Institutional View", International Journal of Physical Distribution & Logistics Management, Vol. 52 No. 9/10, pp. 813-833. https://doi.org/10.1108/IJPDLM-04-2021-0115