663
Dyer and Singh
1998
FIGURE 1 Determinants of Interorganizational Competitive Advantage Determinants of relational rents
Subprocesses facilitating relational rents
la. Duration of safeguards 1. Relation-specific assets lb. Volume of interfirm transactions 2a. Partner-specific absorptive capacity 2. Knowledge-sharing routines 2b. Incentives to encourage transparency and discourage free riding
3a. Ability to identify and evaluate potential complementarities 3. Complementary resources and capabilities 3b. Role of organizational complementarities to access benefits of strategic resource complementarity
4. Effective governance
4a. Ability to employ self-enforcement rather than third-party enforcement governance mechanisms 4b. Ability to employ informal versus formal self-enforcement governance mechanisms
Asanuma (1989) was among the first to document how the relation-specific skills developed between Japanese suppliers and their automakers generated surplus profits and competitive advantages for collaborating firms. Similarly, Dyer (1996a) found a positive relationship between relation-specific investments and performance in a sample of automakers and their suppliers. Additionally, Saxenian (1994) found that Hewlett Packard and other Silicon Valley firms greatly improved performance by developing long-term partnerships with physically proximate suppliers. She claims that proximity in high-technology
industries "greatly facilitates the collaboration required for fast-changing and complex technologies" (1990: 101). Indeed, several scholars have shown that physical proximity created through site-specific investments facilitates interfirm cooperation and coordination, thereby enhancing performance (Dyer, 1996a; Enright, 1995; Nishiguchi, 1994). Finally, Parkhe (1993) found that the commitment of "nonrecoverable investments" in a sample of strategic alliances was positively related to performance. These studies indicate that relational rents generated through relationspecific investments are realized through