Antecedents of contractual completeness: the case of tour operator-hotel allotment contracts

Abstract

This study aims to explain completeness of contracts by using and extending the transaction cost theory. First, we investigate the impact of transaction characteristics (i.e. environmental uncertainty and specific investments) on contractual completeness. In addition the study extends the transaction cost view by investigating the moderating effect of trust on the relationship between transaction characteristics and contractual completeness within the context of transaction cost theory. We offer a completeness scale consisting of contingency planning in hotel allotment contracts. Our results from Turkish tourism industry support the transaction cost hypotheses and the moderating effect of trust on the relationships between transaction cost variables and completeness of contracts. This study extends the transaction cost literature on contractual completeness by showing that trust functions as moderator between the transaction cost variables and contractual completeness.