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construction stage for the infrastructure to operationalise. This entails that, after an investment is made to begin building the … infrastructure, its construction is completed at a cost, which increases with the investment at an increasing rate, and is higher if … investment. Once the infrastructure is in place, the firm manages it, taking advantage of the (usual) synergy between …
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We investigate the role of mutual trust in long-term vertical relationships involving trades of complex goods. High complexity is associated with high contract incompleteness and hence the increased relevance of trust-based relational contracts. Contrary to expectations, we find that changes in...
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We study how informal buyer-supplier relationships in the German automotive industry affect procurement. Using unique data from a survey focusing on these, we show that more trust, the belief that the trading partner acts to maintain the mutual relationship, is associated with both higher...
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