Inter-organizational linkages and resource dependence

Abstract

Few studies have examined the relationship between inter-industry, intercorporate ownership (ICO) patterns and inter-industry resource exchange patterns. Using data from Statistics Canada, this paper reveals a positive association between the degree of ICO linkages and the degree of input–output dependence among Canadian industry groups. This provides empirical support for the primary assertion of resource dependence theory: that corporations employ ICO linkages to manage their input–output dependence resulting from recurrent resource exchanges. This research differs from extant tests of resource dependence in that it uses data for the population of firms (over a size threshold) in Canada and includes all forms of interdependence between enterprises. The findings suggest scenarios in which corporations can adopt ICO linkages to manage resource dependence and reduce transaction costs.