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Broker or Reseller? ——Choice of Transaction Forms in Interdependent Production
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TitleBroker or Reseller? ——Choice of Transaction Forms in Interdependent Production  
AuthorXie Lijuan and Wang Shixun  
OrganizationSchool of Business, Renmin University of China; 
Key WordsTransaction Form; Interdependent Production; Contract Theory; Asset Specificity 
AbstractThe form of transaction can be reducible to the broker and the reseller in consideration of the alienation of the property. The reseller suggests the necessity of which commercial capital is independent of the industry capital referring to Karl Marx. However, the proportion of the broker overwhelms the reseller in China, distorting the balance of the transaction form. We develop the contract theory from the competition market to the supply chain and construct the 'interdependent production' model to analyses the influence of asset specificity. We also use the data of the retailing enterprise and the panel quantile model to test the hypotheses. The conclusion is that the high asset specificity of the upstream and the low asset specificity of the downstream will strengthen the incentive of the brokers, which reduced the commercial capital and weaken its effect. This equilibrium will not lead to the firs-best result so it suggests that the government and industry organization should intervene properly.  
Serial NumberWP1253 
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