Curbing opportunism in logistics outsourcing relationships: The role of relational norms and contract

Logistics outsourcing, as a strategy to obtain competitive advantages, is prevalent in today's business world. However, we know little about logistics outsourcing, especially with regard to opportunistic behavior types and their relational antecedents (e.g., contracts and relational norms) of their opportunism in the third party logistics (3PL) user-provider relationships in emerging economies. Using China's developing 3PL industry as a research context, and social exchange theory and transaction cost economics as the theoretical lenses, we examine how three dimensions of relational norms (information exchange, flexibility, solidarity) influence two dimensions of contracts (detailed contracts, contract application), and how relational norms and contracts simultaneously influence 3PL providers’ opportunism. Using data collected from 247 manufacturing and service firms in China, we empirically test the proposed model and find that detailed contracts and solidarity are effective safeguards in reducing 3PL providers’ opportunistic behavior, while the contract application process leads to opportunism. Furthermore, flexibility is positively related to detailed contracts and the contract application process, which can influence 3PL providers’ opportunism negatively and positively, respectively. This study contributes to the logistics outsourcing, opportunism, and relationship management literature and provides managerial implications for 3PL practices in China.