Governing Green suppy chain: A transaction cost perspective

This project intends to (1) examine the current practices of green collaboration in Taiwan and the Unites States, and (2) to develop and test a theoretical model based on Transaction Cost Economics (TCE). Unlike previous TCE studies in the supply chain management literature that primarily examines the relationships between transaction attributes (asset specificity, risk, frequency) and make-buy decision, this project focuses on how managers could operationalize two governance mechanisms (contractual clauses and relational adaptation) to enhance the effectiveness of green collaboration. Data were collected from 205 manufacturing plants in Taiwan and USA to test the model. The results reveal the relative effectiveness of the two primary governance mechanisms, contract and relational adaptation; this is an important issue that previous TCE studies fail to address. The results also provide the mangers with the guidelines of utilizing both mechanisms, which would definitely be helpful to the implementation of green initiatives.