The Impact of Domain Knowledge Specific Investments on Receivers' Opportunism and Governance Mechanisms

Abstract

Abstract:

Using the sample data from 163 software outsourcing relationships, this research explores the possibly unique impact of domain knowledge specific investments(DKSIs) on the receiving firms' opportunism and the moderating effects of relational and contractual governance mechanisms by means of hierarchical linear regression. The results are as follows. Firstly, DKSIs by the software providers significantly suppress their clients' opportunism. Secondly, relational norms and contractual completeness not only positively moderate the negative relationship between DKSIs and clients' opportunism, but also have direct suppressing effects. Thirdly, contractual completeness and relational norms are complementary to each other to some extent. Lastly, contractual completeness shows stronger impact than relational norms. This study reveals the particular effect of DKSIs on the receivers' opportunism and deepens our understanding of the governing impacts of contractual completeness and relational norms.

Key words: domain knowledge-specific investments, opportunism, contractual completeness, relational norms

Zhou Jun, Yuan Jianxin. The Impact of Domain Knowledge Specific Investments on Receivers' Opportunism and Governance Mechanisms[J]. , 2015, 27(11): 170-180.

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