Logistics Outsourcing, Contract Complexity and Performance of Australian Exporters

Seu Keow Cheng, Jose Tongzon


Most research on outsourcing of logistics services ignore the inter-relationship between logistics outsourcing and outsourcing contractual arrangements that govern performance. This is challenging since it is how these contracts are structured together with the nature of logistics functions outsourced that may determine how firms will improve their business performance. The purpose of this research, therefore, is to fill this gap by proposing and testing the moderating effect of contractual complexity on the relationship between logistics outsourcing and performance. A key contribution of this study is the development of a conceptual model that integrates the tenets of transaction cost theory, resource-based theory and contractual complexity theory for analysing the indicated moderating effect on performance including financial effectiveness and strategic logistical capabilities. We adopted a survey-based approach to evaluate the different elements that link the nature of logistics services outsourced and contract arrangements. These elements were characterised as transaction; process or relationship-related. Using a sample drawn from the Australian Exporters Database, the findings of this study, using simple mediation regression analysis (Barron and Kenny, 1986), suggest that contracts have an indirect influence on performance, and that contract clauses should be differentiated according to the nature of logistics functions outsourced and performance objectives.

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