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Joskow (1987) examined the importance of specific investments to the contract duration of coal contracts. Since different price-adjust mechanisms are also adopted and provide different incentives during a long-term relationship, this paper examines how the level of specific investments affect...
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-specific product for a buyer and under what circumstances a governance arrangement designed to share investment costs between the … transacting parties increases the investment in relationship-specific assets. We offer a balanced perspective that emphasizes both … competition effects generated by alternative investment plans. The model and its extensions generate new insights into investment …
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Firms that engage in long-term bilateral relationships with their buyers or suppliers are usually required to make relationship-specific investments. We examine how the values of these long-term specific investments are affected by the quality of governmental contract enforcement. We find that...
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