Competition and trust: Evidence from German car manufacturers

Arbeitspapier

We explore the determinants and effects of trust relationships between upstream suppliers and downstream producers. Using unique survey data on individual supplier-buyer relationships in the German automotive industry, we show, by means of different measures of supplier-buyer trust, that higher levels of trust mitigate relationship-specific underinvestment in a classical hold-up situation. Moreover, contrary to the extant literature, we show that higher levels of supplier's trust are reflected in the buyer's choice of a more competitive procurement strategy among potential suppliers.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 11-072

Classification and Topics

• Classification: Wirtschaft ; Economics of Contract: Theory ; Firm Behavior: Empirical Analysis ; Firm Organization and Market Structure ; Automobiles; Other Transportation Equipment; Related Parts and Equipment
• Subject: trust ; hold-up problem ; competition ; specific investment ; suppliers ; car manufacturers ; German automotive industry ; Kraftfahrzeugindustrie ; Kraftfahrzeugzulieferer ; Lieferanten-Kunden-Beziehung ; Vertrauen ; Sunk Costs ; Wettbewerb ; Beschaffungsplanung ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Felli, Leonardo ; Koenen, Johannes ; Stahl, Konrad O.
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/54972
• Last update: 10.03.2025, 11:43 AM CET