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|Title:||Competition and trust: Evidence from German car manufacturers |
Stahl, Konrad O.
|Issue Date:||2011 |
|Series/Report no.:||CESifo working paper: Industrial Organisation 3358|
|Abstract:||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.|
German automotive industry
|Document Type:||Working Paper|
|Appears in Collections:||CESifo Working Papers, CESifo Group Munich|
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