Large retailers use strategic alliances with suppliers in order to obtain customized distribution services from the suppliers. Forming strategic alliances with large retailers requires suppliers to make relationship-specific investments in the retailers. Transaction cost analysis suggests that the investments create a potential of hold up and discourage suppliers from forming the alliance. This study considers that regulatory focus of suppliers is a determinant of forming strategic alliance. It hypothesizes that promotion-focused suppliers are likely to accept an uncertain alliance with larger retailers even if it requires them to make relationship-specific investments. On the other hand, it is suggested that prevention-focused suppliers are unlikely to accept the same offer under the same conditions.

• Tomokazu Kubo(Chuo University, Japan)