Transaction governance structure, institutional voids and transaction efficiency: An analysis of small and medium-sized enterprises in emerging markets

In an emerging market and developing economies, transaction governance structure (TGS) plays a crucial role in determining transaction costs (TC) and transaction efficiency (TE) for small and medium-sized enterprises (SMEs). The presence of institutional voids (IVs) further complicates the situation by adding uncertainty and complexity to the transactions. Therefore, understanding the interplay between TGS, TC, TE, and IVs is essential for SMEs to thrive and contribute to the overall economic growth of the country. This study investigates the impact of transaction governance structure on transaction efficiency with the moderating effect of institutional voids on small and medium-sized IT and software firms in Bangladesh. A sample of 131 SMEs was selected using nonprobability convenience and snowball sampling techniques. Data were collected using a self-administered structured questionnaire with a 5-point Likert scale and analysed using the PLS-SEM approach. The study findings reveal that TGS significantly and positively impacts TE, and IV moderates the relationship between TGS and TE positively. The results of the study reveal that TGS plays a crucial role in reducing transaction costs and enhancing transaction efficiency for small and medium-sized firms in Bangladesh, thus presenting opportunities for inclusive growth and development in the country's software and IT sector. This study provided valuable insights for policymakers and practitioners on the importance of TGS and IV in enhancing transaction efficiency. Additionally, the study acknowledges the significance of meeting social and environmental needs by leveraging corporate assets and expertise, strengthening a company's competitive strategy, and developing new business opportunities.