@article{oai:nagoya.repo.nii.ac.jp:00018964, author = {Yoneda, Koji and Minagawa, Tadashi}, issue = {E14-10}, journal = {Economic Research Center Discussion Paper}, month = {Dec}, note = {Long-term business relationships with specific investments prevail extensively in transactions of intermediate goods, while economic theories have traditionally presumed market transactions. But relation-specific production is also known to have a weakness to economic shocks. This paper provides models of specific relations between a manufacturer and its suppliers, examining how the degree of specificity affects the impact of demand shocks on the ways of production, on the value of output, and the like. The main findings we obtained are as follows. (i) Once the market conditions fall below some critical level, specific relations break down rapidly. (ii) Facing a large drop in demand, the percentage decrease in the value of output is greater in an industry with higher specificity than lower specificity. (iii) Specific relations make output more responsive to negative demand shocks.}, title = {Specificity and Economic Performance}, year = {2014} }