10 Questions
Why are shipments to countries with weak institutions more likely to involve trade credit?
To bypass legal constraints on financing international sourcing.
What sustains cooperation in trading relationships according to the text?
Threat to revert to defection tomorrow.
How can long-term relational contracts help overcome legal constraints in international sourcing?
By often being more impactful than contractual governance.
What is a common strategy employed in shipments to countries with weak institutions?
Implementing post-shipment trade credit agreements.
Why do repeated interactions between parties in trading relationships matter?
To sustain cooperation and overcome legal constraints.
In the context of international sourcing, why is reliance on relational contracts emphasized?
To mitigate legal constraints more effectively than contractual governance.
What role do legal institutions play in constraining distributors' ability to finance international sourcing?
Constrain distributors from financing international sourcing.
Why are long-term relational contracts preferred over short-term contractual governance?
Due to their greater impact in overcoming legal constraints.
What is a key drawback of relying solely on cash-in-advance contracts for international sourcing?
Higher risk of non-payment from buyers.
How does common law origin of shipment countries correlate with contract enforcement?
It has been shown to correlate positively with contract enforcement.
Test your knowledge on the comprehensive database of global outsourcing relationships in the telecom industry. Explore data on 100 suppliers, 155 buyers, from 1995 to 2010, focusing on Europe, North America, Japan, China, South Korea, and Taiwan. Evaluate variables such as supplier's technological capabilities and marketing capabilities.
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