The selection of contracts in supply chains: An empirical analysis

• Performance only explains the implementation of quantity-based contracts.
• Supply chain (SC) integration helps to achieve lots of quantity-based contracts.
• SC integration does not justify the adoption of any price-based contract.
• SC orientation predicts the usage of all price-based contracts.
• SC orientation only entails the adoption of few quantity-based contracts.

This paper seeks to empirically identify the key drivers for firms in selecting a contract in a supply chain by investigating their performance, supply chain orientation, and supply chain integration. A conceptual model is drawn up based on the existing literature in supply chain coordination contracts, performance, supply chain orientation, and supply chain integration and tested on a large sample of European firms. Multiple and multinomial logistic regression models allow for estimating the relationships between these variables. Our results demonstrate that the selection of contracts and the probability of their adoption depend on several combinations of firms' performance, supply chain orientation, and integration. Overall, the research provides an empirical contribution to the literature on coordination with contracts, which turns out to be mainly game theory based.