|Construct: Asset Specificity|
By McGuinness (1994), asset specificity refers to the extent to which the investments made to support a particular transaction have a higher value to that transaction than they would have if they were redeployed for any other purpose.
By Williamson (1981, 1981b), an input used by a firm or individual consumer is highly asset specific, if it cannot readily be used by other firms because of the site specificity, physical asset specificity, or human asset specificity.
By Williamson (1985, 1986), transaction-specific assets are non-redeployable physical and human investments that are specialized and unique to a task. For example the production of a certain component may require investment in specialized equipment, the distribution of a certain product may necessitate unique physical facilities, or the delivery of a certain service may be predicted on the existence of an uncommon set of professional know-how and skills.
concept: Service Idiosyncrasy
By Erramilli and Rao (1993), an idiosyncratic service is defined as one that is characterized by "high" levels of professional skills, specialized know-how, and customization. And asset specificity is represented by the degree of idiosyncrasy that characterizes a service.
Scholars have acknowledged the multidimensional property of asset specificity. For example, Williamson (1983) identified three dimensions of asset specificity:
Malone et al. (1987) made an important addition to the above list:
Similarly, Joskow (1988) identified four sources of asset specificity:
Joskow also pointed out that these different categories point to essentially the same phenomenon, but that it is instructive in empirical analyses to treat each category distinctly.
Zaheer and Venkatraman (1994) acknowledge four asset specificity dimensions: site, human, physical, and dedicated assets. In addition, they define two dimensions of asset specificity in their study: human asset specificity and the newly-developed "procedural asset specificity", where
and Rao (1993) identified the following dimensions for service idiosyncrasy:
Most theoretical work focus on the relationships between asset specificity and sunk cost effects, transaction costs, vertical integration, and uncertainties (e.g., see Joskow 1988, Anderson 1985, John and Weitz 1988, and Whyte 1994).