Industrial clusters and factory industries co-develop during industrialization and the relational contracts between manufacturers and subcontractors are the organizational basis of clusters. We predict that relational transactions between manufacturers and subcontractors and cooperative action...

Transaction costs depend on the degree of informational asymmetry in trading goods. This environment provides commitment to certain quality with an opportunity to earn quality premium given the degree of asymmetry. A device of commitment to quality could be inspection and branding either by a...