Transaction-Specific Investment and Organizational Performance: A Meta-Analysis

Transaction-specific investment and organizational performance are two core concepts in studies of transactions between firms. The existing literature has explored the effect of transaction-specific investment on organizational performance from three different theoretical perspectives: transaction cost economics (TCE), the resource-based view (RBV), and social exchange theory (SET). However, considerable ambiguities and inconsistencies exist among the hypotheses and relevant empirical study results, which have brought confusion to academic research and practice. This study adopted a meta-analysis method to conduct a quantitative review of 58 existing empirical studies, and obtained a total sample size of 16,092. These results suggest more TSIs in buyer-seller relationships, which can improve both economic and social performance, especially regarding technological performance and relationship performance. Moreover, tangible TSIs are more efficient, although they are considered vulnerable to opportunistic behavior in previous research, and contextual factors are also considered as moderators. These findings enrich the existing inter-firm relationship literature and provide clear suggestions for companies' TSI decisions.