AMAP BDS K&P: Research Hypotheses
This paper discusses the "intervention based approach" to research hypotheses. It states that "Component A" research hypotheses are designed to improve our understanding of how firm owners in value chains respond to the interaction of governance, expected returns, transaction costs, social capital and risk.
The paper presents two groups of hypotheses, both of which should generate useful information for designing program interventions.The first group of hypotheses discusses inter-firm cooperation and coordination. It focuses on interventions that will create win-win situations between firms in value chains.
- It states that the hypotheses in vertical relationships are:
- Risk can be reduced by strengthening governance;
- Trust can be increased by improving information;
- Lead firms will be more willing to form vertical relationships with micro and small enterprises (MSEs) if the transaction costs can be reduced.
- In horizontal relationships, the hypotheses are:
- MSE owners will be more willing to form horizontal relationships if the transaction costs are reduced;
- Trust can be increased through organizational innovation and improvements in human capital;
- Social capital plays an important role.
The second group of hypotheses focuses on improving the incentives for MSE owners to upgrade their business and enhance their contribution to the productivity of value chains. They are:
- MSE owners base their upgrading decisions on their assessment of the expected returns and risks to upgrading;
- Upgrading can be encouraged by strengthening the linkages between firms;
- Lack of information is a critical barrier to MSE upgrading.
