DOCSLIB.ORG

The Federal Definition of Tax Partnership

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Federal Definition of Tax Partnership Brooklyn Law School BrooklynWorks Faculty Scholarship Winter 2006 The edeF ral Definition of Tax Partnership Bradley T. Borden [email protected] Follow this and additional works at: https://brooklynworks.brooklaw.edu/faculty Part of the Other Law Commons, Taxation-Federal Commons, and the Tax Law Commons Recommended Citation 43 Hous. L. Rev. 925 (2006-2007) This Article is brought to you for free and open access by BrooklynWorks. It has been accepted for inclusion in Faculty Scholarship by an authorized administrator of BrooklynWorks. ARTICLE THE FEDERAL DEFINITION OF TAX PARTNERSHIP Bradley T. Borden* TABLE OF CONTENTS I. INTRODU CTION ...................................................................... 927 II. THE DEFINITIONS OF MULTIMEMBER TAx ENTITIES ............ 933 A. The EstablishedDefinitions .......................................... 933 B. The Open Definition: Tax Partnership......................... 936 III. HISTORY AND PURPOSE OF PARTNERSHIP TAXATION ............ 941 A. The Effort to Disregard................................................. 941 B. The Imposition of Tax Reporting Requirements ........... 943 C. The Statutory Definition of Tax Partnership............... 946 D. The 1954 Code: An Amalgam of the Entity and Aggregate Theories........................................................ 948 E. The Section 704(b) Allocation Rules and Assignment of Incom e ....................................................................... 951 F. The Anti-Abuse Rules .................................................... 956 * Associate Professor of Law, Washburn University School of Law, Topeka, Kansas; LL.M. and J.D., University of Florida Levin College of Law; M.B.A. and B.B.A., Idaho State University. I thank Steven A. Bank, Stanley L. Blend, Terrence F. Cuff, Steven Dean, Alex Glashausser, Christopher Hanna, Brant J. Hellwig, Dennis R. Honabach, Erik M. Jensen, L. Ali Khan, Martin J. McMahon, Jr., Stephen W. Mazza, William G. Merkel, Robert J. Rhee, William Rich, and Ira B. Shepard for their helpful comments on earlier drafts of this Article. I thank Robin Anderson and Craig M. Gillen for their valuable research assistance. I thank Patty Cates and Tonya Worley for help in preparing the document for publication. I thank Washburn University School of Law for its summer stipend. Finally, I thank my wife Samantha and daughter Claire for their unwavering support and encouragement in this undertaking. All opinions expressed herein and any errors are my own. 925 926 HOUSTON LAW REVIEW [43:4 IV. EFFECT OF THE DEFINITION OF TAX PARTNERSHIP .............. 957 A. Timing and Accounting Rules ...................................... 957 B. TransactionalRules ...................................................... 960 C. ProceduralRules ........................................................... 964 D. Call for Certainty .......................................................... 969 V. THE DEFINITIONS OF PARTNERSHIP ..................................... 970 A. The Substantive-Law Definition of Partnership.......... 971 B. The Ten Tests Used to Define Tax Partnership............ 975 1. The Substantive-Law Test ..................................... 975 2. The State-Law Test ................................................ 982 3. The Joint-ProfitTest .............................................. 984 4. The Expense-Sharing Test ..................................... 991 5. The Degree-of-Activity Test .................................... 991 6. The Type-of-Activity Test ....................................... 992 7. The Source-of-Activity Test .................................... 995 8. The Business-PurposeTest .................................... 998 9. The Estoppel Test ................................................. 1000 10. The Fact-QuestionTest ........................................ 1001 VI. THE ANALYTICAL PLATFORM FOR EVALUATING TH E T ESTS ........................................................................... 1001 A . C ertainty ..................................................................... 1002 B . E quity .......................................................................... 1002 1. Standard Equity .................................................. 1003 2. Deviation Equity .................................................. 1004 C. N eutrality.................................................................... 1006 D. Simplicity lAdministrability....................................... 1007 VII. THE EVALUATIONS .............................................................. 1008 A. Tests That Fail Tax Policy Scrutiny ........................... 1008 1. The Substantive-Law Test ................................... 1008 2. The State-Law Test .............................................. 1010 3. The Fact-QuestionTest ........................................ 1011 B. Tests That Pass Tax Policy Scrutiny .......................... 1012 1. The Degree-of-Activity Test .................................. 1012 2. The Type-of-Activity Test ..................................... 1014 3. The Estoppel Test ................................................. 1015 C. Tests That Receive Exceptional Scores ....................... 1017 1. The Joint-ProfitTest ............................................ 1017 2. The Expense-Sharing Test ................................... 1023 3. The Source-of-Activity Test .................................. 1024 4. The Business-PurposeTest .................................. 1026 VIII. A POLICY-BASED DEFINITION OF TAx PARTNERSHIP ........ 1026 20061 TAX PARTNERSHIP 927 IX . C ONCLUSION ....................................................................... 1031 I. INTRODUCTION "When an entity must be classified for purposes of a Federal income tax statute, policy considerations of Federal income tax law should govern that classification...."' Thus spoke the Tax Court, honoring federal income tax policy with its pen, but remaining far from it in application.2 In fact, although the federal definition of tax3 partnership has been at issue in over 150 statutes, cases, regulations, and rulings,' it is the rare occasion that tax policy has governed attempts to define tax partnership.5 This neglect of tax policy has contributed to the vast tangle of legal authority that addresses the definition of tax partnership. This Article unravels that tangled mess, identifies the several tests that have been used to define tax partnership, and evaluates each of them using a tax policy platform.6 It then 1. Wheeler v. Comm'r, 37 T.C.M. (CCH)883, 889 (1978). 2. Id. at 889-91 (citing precedent for a multifactor test and then looking to the parties' contributions to hold that the arrangement was a tax partnership, but failing to discuss why the factors or contributions are relevant under tax policy); see also Mark 7:6 ("Well hath Esaias prophesied of you hypocrites, as it is written, 'This people honoureth me with their lips, but their heart is far from me.'"). 3. All subsequent references to "tax" are to federal income tax, unless stated otherwise. 4. This number is based on the Author's count of statutes, cases, regulations, and rulings discussed and cited in this Article and others the Author either read or came across in his research. These sources will hereinafter be referred to as "ArticleSources & Author's Research Findings." 5. Congress and a small handful of courts have directly addressed tax policy. See, e.g., Haley v. Comm'r, 203 F.2d 815, 818 (5th Cir. 1953) ("Substance rather than form controls in applying the federal tax statutes, and 'the realities of the taxpayer's economic interest, rather than the niceties of the conveyancer's art, should determine the power to tax.'" (quoting Helvering v. Safe Deposit & Trust Co., 316 U.S. 56, 58 n.1 (1942))); Maletis v. United States, 200 F.2d 97, 97-98 (9th Cir. 1952) (discussing the tax policy of the estoppel test); H.R. REP. No. 72-708, at 53 (1932) (indicating that Congress enacted a broad definition of tax partnership to require arrangements that are similar to partnerships to make similar returns and account for their operations similarly); see also infra Part III.B (concluding that congressional mandates regarding partnership accounting aimed to increase equity, simplicity, and administrability). 6. Some commentators have considered the definition of tax partnership, but those considerations usually only cover a few cases and adopt an approach similar to that adopted by the courts and the Internal Revenue Service (IRS). See, e.g., Richard M. Lipton, When Is a PartnerNot a Partner?,in 1 TAX PLANNING FOR DOMESTIC & FOREIGN PARTNERSHIPS, LLCS, JOINT VENTURES & OTHER STRATEGIC ALLIANCES 845, 849-60 (Louis S. Freeman & Clifford M. Warren eds., 2005) (examining a handful of cases that have addressed the definition of tax partnership); E. John Wagner Il & Susan Barrett Hecker, Evaluating and Making a Choice of "No Entity" for Real Property Held for Investment or Lease, FLA. B.J., July-Aug. 2001, at 43, 44-45 (advising on how to avoid tax partnership classification in real property co-ownership situations and citing a handful of cases as support); Donald J. Weidner, The Existence of State and Tax Partnerships:A 928 HOUSTON LAW REVIEW [43:4 proposes a policy-based definition of tax partnership. In essence, the Article reviews and evaluates the results of almost a century of lawmaking and proposes that the law take a new direction.7 Although the definition of tax partnership has a significant history, three recent developments have drawn renewed attention to
Load more

Recommended publications
  • Partnership Management & Project Portfolio Management
    Partnership Management & Project Portfolio Management Partnerships and strategic management for projects, programs, quasi- projects, and operational activities In the digital age – we need appropriate socio-technical approaches, tools, and methods for: • Maintainability • Sustainability • Integration • Maturing our work activities At the conclusion of this one-hour session, participants will: • Be able to define partnership management and project portfolio management. • Be able to identify examples of governance models to support partnerships. • Be able to share examples of document/resource types for defining and managing partnerships within project portfolio management. • Be able to describe how equity relates to partnerships and partnership management. Provider, Partner, Pioneer Digital Scholarship and Research Libraries Provider, Partner, Pilgrim (those who journey, who wander and wonder) https://www.rluk.ac.uk/provider-partner-pioneer-digital-scholarship-and-the-role-of-the-research-library-symposium/ Partners and Partnership Management Partner: any individual, group or institution including governments and donors whose active participation and support are essential for the successful implementation of a project or program. Partnership Management: the process of following up on and maintaining effective, productive, and harmonious relationships with partners. It can be informal (phone, email, visits) or formal (written, signed agreements, with periodic review). What is most important is to: invest the time and resources needed to
    [Show full text]
  • RESTORING the LOST ANTI-INJUNCTION ACT Kristin E
    COPYRIGHT © 2017 VIRGINIA LAW REVIEW ASSOCIATION RESTORING THE LOST ANTI-INJUNCTION ACT Kristin E. Hickman* & Gerald Kerska† Should Treasury regulations and IRS guidance documents be eligible for pre-enforcement judicial review? The D.C. Circuit’s 2015 decision in Florida Bankers Ass’n v. U.S. Department of the Treasury puts its interpretation of the Anti-Injunction Act at odds with both general administrative law norms in favor of pre-enforcement review of final agency action and also the Supreme Court’s interpretation of the nearly identical Tax Injunction Act. A 2017 federal district court decision in Chamber of Commerce v. IRS, appealable to the Fifth Circuit, interprets the Anti-Injunction Act differently and could lead to a circuit split regarding pre-enforcement judicial review of Treasury regulations and IRS guidance documents. Other cases interpreting the Anti-Injunction Act more generally are fragmented and inconsistent. In an effort to gain greater understanding of the Anti-Injunction Act and its role in tax administration, this Article looks back to the Anti- Injunction Act’s origin in 1867 as part of Civil War–era revenue legislation and the evolution of both tax administrative practices and Anti-Injunction Act jurisprudence since that time. INTRODUCTION .................................................................................... 1684 I. A JURISPRUDENTIAL MESS, AND WHY IT MATTERS ...................... 1688 A. Exploring the Doctrinal Tensions.......................................... 1690 1. Confused Anti-Injunction Act Jurisprudence .................. 1691 2. The Administrative Procedure Act’s Presumption of Reviewability ................................................................... 1704 3. The Tax Injunction Act .................................................... 1707 B. Why the Conflict Matters ....................................................... 1712 * Distinguished McKnight University Professor and Harlan Albert Rogers Professor in Law, University of Minnesota Law School.
    [Show full text]
  • The Joint Committee on Taxation and Codification of the Tax Laws
    The Joint Committee on Taxation and Codification of the Tax Laws George K. Yin Edwin S. Cohen Distinguished Professor of Law and Taxation University of Virginia Former Chief of Staff, Joint Committee on Taxation February 2016 Draft prepared for the United States Capitol Historical Society’s program on The History and Role of the Joint Committee: the Joint Committee and Tax History Comments welcome. THE UNITED STATES CAPITOL HISTORICAL SOCIETY THE JCT@90 WASHINGTON, DC FEBRUARY 25, 2016 The Joint Committee on Taxation and Codification of the Tax Laws George K. Yin* February 11, 2016 preliminary draft [Note to conference attendees and other readers: This paper describes the work of the staff of the Joint Committee on Internal Revenue Taxation (JCT)1 that led to codification of the tax laws in 1939. I hope eventually to incorporate this material into a larger project involving the “early years” of the JCT, roughly the period spanning the committee’s creation in 1926 and the retirement of Colin Stam in 1964. Stam served on the staff for virtually this entire period; he was first hired (on a temporary basis) in 1927 as assistant counsel, became staff counsel in 1929, and then served as Chief of Staff from 1938 until 1964. He is by far the longest‐serving Chief of Staff the committee has ever had. The conclusions in this draft are still preliminary as I have not yet completed my research. I welcome any comments or questions.] Possibly the most significant accomplishment of the JCT and its staff during the committee’s “early years” was the enactment of the Internal Revenue Code of 1939.
    [Show full text]
  • Misc Publications MP-02
    TAX FOUNDATION, INC. 50 Rockefeller Plaz a New York, N. Y. August 15, 1940 1 FORMM This conrpilation and bibliography are presented in th e hone that they will contribute to a fuller understanding of a difficult and at times controversial subject . In selecting the materials included an effort was made to obtain a cross section of opinions cnnd points of view . Attention is directed to the bibliograpay of periodical and special materials on war, profit s and excess profits thxation issued from 1916 to 1940. In the light of recent event s, the body of literature developed as P. result of our experience with those forms of taxation during and immodiately after the War of 1914--1919 has assumed anew significance . August 15, 1940 xA FOUIMATION 0 At Page Current Proposals 1 Some Aspects of the Profit-Tax Bill 2 The Excess-Profits Tart 3 Taxation and National Defense 4 Holding Up Defense 5 Excess-Profit Tax Hinges on Business 6 The Revenue Angle 7 The Basis 11or An Excess-Profits Tax 9 The Valuation cf Business Investments 9 Effects of Excess Profits Taxes 1 0 Excess Profits Tax : A Wartime Measure 11 Excess Profits Taxes, 1933 o 1940 1 2 The World War and Postwar Pederal :Taxation 1 3 Wartime Taxes on Profits 14 LIST OF TABLE S National Defense Expenditures, Fiscal Years 1928-1941 15 Taxes, Not Income and Dividends of All Activ e Corporations in the United States 16 Effects of Tax Increases 1 7 Table Showing 7,899 Representative Corporations Classified According to Amount of Invested Capital and R :titio of Net Income to Invested Capital During tho Taxable Year 18 Excess-Profits Taxes of Twelve Coal Companies 19 BIBLIOGRAPHY :Bibliographer on Par Profits and Excoss Profits Taxos 20 1 .
    [Show full text]
  • Partnership Agreement Example
    Partnership Agreement Example THIS PARTNERSHIP AGREEMENT is made this __________ day of ___________, 20__, by and between the following individuals: Address: __________________________ ___________________________ City/State/ZIP:______________________ Address: __________________________ ___________________________ City/State/ZIP:______________________ 1. Nature of Business. The partners listed above hereby agree that they shall be considered partners in business for the following purpose: ______________________________________________________________________________ ______________________________________________________________________________ 2. Name. The partnership shall be conducted under the name of ________________ and shall maintain offices at [STREET ADDRESS], [CITY, STATE, ZIP]. 3. Day-To-Day Operation. The partners shall provide their full-time services and best efforts on behalf of the partnership. No partner shall receive a salary for services rendered to the partnership. Each partner shall have equal rights to manage and control the partnership and its business. Should there be differences between the partners concerning ordinary business matters, a decision shall be made by unanimous vote. It is understood that the partners may elect one of the partners to conduct the day-to-day business of the partnership; however, no partner shall be able to bind the partnership by act or contract to any liability exceeding $_________ without the prior written consent of each partner. 4. Capital Contribution. The capital contribution of
    [Show full text]
  • The Progressive Movement and the Reforming of the United States of America, from 1890 to 1921
    2014 Democratic and Popular Republic of Algeria. Ministry of Higher Education and Scientific Research. University of Oran. Faculty of Letters, Languages, and Arts. Department of English. Research Paper Submitted for a Doctorate Thesis in American Civilisation Entitled: The Progressive Movement and the Reforming of the United States of America, from 1890 to 1921. Presented by: Benketaf, Abdel Hafid. Jury Members Designation University Pr. Bouhadiba, Zoulikha President Oran Pr. Borsali, Fewzi Supervisor Adrar Pr. Bedjaoui, Fouzia Examiner 1 Sidi-Belabes Dr. Moulfi, Leila Examiner 2 Oran Dr. Belmeki, Belkacem Examiner 3 Oran Dr. Afkir, Mohamed Examiner 4 Laghouat Academic Year: 2013-2014. 1 Acknowledgements Acknowledgments are gratefully made for the assistance of numerous friends and acquaintances. The largest debt is to Professor Borsali, Fewzi because his patience, sound advice, and pertinent remarks were of capital importance in the accomplishment of this thesis. I would not close this note of appreciation without alluding to the great aid provided by my wife Fatima Zohra Melki. 2 Dedication To my family, I dedicate this thesis. Pages Contents 3 List of Tables. ........................................................................................................................................................................ vi List of Abbreviations......................................................................................................................................................... vii Introduction. ........................................................................................................................................................................
    [Show full text]
  • Limited Liability Partnerships
    inbrief Limited Liability Partnerships Inside Key features Incorporation and administration Members’ Agreements Taxation inbrief Introduction Key features • any members’ agreement is a confidential Introduction document; and It first became possible to incorporate limited Originally conceived as a vehicle liability partnerships (“LLPs”) in the UK in 2001 • the accounting and filing requirements are for use by professional practices to after the Limited Liability Partnerships Act 2000 essentially the same as those for a company. obtain the benefit of limited liability came into force. LLPs have an interesting An LLP can be incorporated with two or more background. In the late 1990s some of the major while retaining the tax advantages of members. A company can be a member of an UK accountancy firms faced big negligence claims a partnership, LLPs have a far wider LLP. As noted, it is a distinct legal entity from its and were experiencing a difficult market for use as is evidenced by their increasing members and, accordingly, can contract and own professional indemnity insurance. Their lobbying property in its own right. In this respect, as in popularity as an alternative business of the Government led to the introduction of many others, an LLP is more akin to a company vehicle in a wide range of sectors. the Limited Liability Partnerships Act 2000 which than a partnership. The members of an LLP, like gave birth to the LLP as a new business vehicle in the shareholders of a company, have limited the UK. LLPs were originally seen as vehicles for liability. As he is an agent, when a member professional services partnerships as demonstrated contracts on behalf of the LLP, he binds the LLP as by the almost immediate conversion of the major a director would bind a company.
    [Show full text]
  • Basic Concepts Page 1 PARTNERSHIP ACCOUNTING
    Dr. M. D. Chase Long Beach State University Advanced Accounting 1305-87B Partnership Accounting: Basic Concepts Page 1 PARTNERSHIP ACCOUNTING I. Basic Concepts of Partnership Accounting A. What is A Partnership?: An association of two or more persons to carry on as co-owners of a business for a profit; the basic rules of partnerships were defined by Congress: 1. Uniform Partnership Act of 1914 (general partnerships) 2. Uniform Limited Partnership Act of 1916 (limited partnerships) B. Characteristics of a Partnership: 1. Limited Life--dissolved by death, retirement, incapacity, bankruptcy etc 2. Mutual agency--partners are bound by each others’ acts 3. Unlimited Liability of the partners--the partnership is not a legal or taxable entity and therefore all debts and legal matters are the responsibility of the partners. 4. Co-ownership of partnership assets--all assets contributed to the partnership are owned by the individual partners in accordance with the terms of the partnership agreement; or equally if no agreement exists. C. The Partnership Agreement: A contract (oral or written) which can be used to modify the general partnership rules; partnership agreements at a minimum should cover the following: 1. Names or Partners and Partnership; 2. Effective date of the partnership contract and date of termination if applicable; 3. Nature of the business; 4. Place of business operations; 5. Amount of each partners capital and the valuation of each asset contributed and date the valuation was made; 6. Rights and responsibilities of each partner; 7. Dates of partnership accounting period; minimum capital investments for each partner and methods of determining equity balances (average, weighted average, year-end etc.) 8.
    [Show full text]
  • Re-Assessing the Costs of the Stepped-Up Tax Basis Rule
    Tulane Economics Working Paper Series Re-assessing the Costs of the Stepped-up Tax Basis Rule Jay A. Soled Richard L. Schmalbeck James Alm Rutgers Business School Duke Law School Tulane University [email protected] [email protected] [email protected] Working Paper 1904 April 2019 Abstract The stepped-up basis rule applicable at death (IRC section 1014) has always been a major source of revenue loss. Now, in the absence of a meaningful estate tax regime, taxpayers and their estate executors and administrators are likely to report inated date-of-death asset values. As a result, the revenue loss associated with this tax expenditure, called the stepped-up tax basis rule, will surely increase markedly. The Internal Revenue Service will no doubt attempt to police excessive tax basis adjustments, but the agency lacks the resources to do so adequately. Congress should therefore institute reforms to ensure proper tax basis identication. Keywords: Estate tax, capital gains, stepped-up basis tax rule. JEL codes: H2, H3. RE-ASSESSING THE COSTS OF THE STEPPED-UP TAX BASIS RULE Jay A. Soled, Richard L. Schmalbeck, & James Alm* The stepped-up basis rule applicable at death (IRC section 1014) has always been a major source of revenue loss. Now, in the absence of a meaningful estate tax regime, taxpayers and their estate executors and administrators are likely to report inflated date- of-death asset values. As a result, the revenue loss associated with this tax expenditure, called the “stepped-up tax basis rule”, will surely increase markedly. The Internal Revenue Service will no doubt attempt to police excessive tax basis adjustments, but the agency lacks the resources to do so adequately.
    [Show full text]
  • Legal Status of Capital Gains
    LEGAL STATUS OF CAPITAL GAINS PREPARED BY THE STAFF OF THE JOINT COMMITTEE ON INTERNAL REVENUE TAXATION DECEMBER 4, 1959 UNITED STATES GOVERNMENT PRINTING OFFICE 48572 WASHINGTON : 1959 J0810-59 LEGAL STATUS OF CAPITAL GAINS HISTORICAL PERIOD PRIOR TO THE 16TH AMENDMENT The power of the CQngress to subject capital gains to an income tax is now fully established by decisions of the Suprenle Court. Even in our first inconle tax statute (act of 1861, 12 Stat. 292) Congress used language broad enough to warrant the taxation of "annual cap­ ital gains." This first act levied on income tax to be paid upon the "annual income" deriyecl fronl certain sources, including income "deriyed from an:r kind of property" and contained a catchall provi­ sion s,,~eeping in "income derived fronl any other source whatever" with certain exceptions having no relation to capital gains. This act was neYer put into effect and was superseded by- the act of 1862 (12 Stat. 432), ,,~hich was similar in this respect to the 1861 act except that the basis of the tax was changed fronl "annual income" to the longer nhrase "annual gains, profits, or income." It \vas not until the act of 1864 (13 Stat. 223) that income derived fronl sales of prop­ erty was specifically mentioned. This last act contained the same general definition of income referred to in the prior acts, with an additional proviso- that net profits realized by sales of real estate purchased within the year for which income is estimated, shall be chargeable as income; and losses on sales of real estate purchased within the year for which income is estimated, shall be deducted from the income of such year.
    [Show full text]
  • Limited Partnerships
    INTELLECTUAL PROPERTY AND TRANSACTIONAL LAW CLINIC LIMITED PARTNERSHIPS INTRODUCTORY OVERVIEW A limited partnership is a business entity comprised of two or more persons, with one or more general partners and one or more limited partners. A limited partnership differs from a general partnership in the amount of control and liability each partner has. Limited partnerships are governed by the Virginia Revised Uniform Partnership Act,1 which is an adaptation of the 1976 Revised Uniform Limited Partnership Act, or RULPA, and its subsequent amendments. HOW A LIMITED PARTNERSHIP IS FORMED To form a limited partnership in Virginia, a certificate of limited partnership must be filed with the Virginia State Corporation Commission. This is different from general partnerships which require no formal recording with the Commonwealth. The certificate must state the name of the partnership,2 and, the name must contain the designation “limited partnership,” “a limited partnership,” “L.P.,” or “LP;” which puts third parties on notice of the limited liability of one or more partners. 3 Additionally, the certificate must name a registered agent for service of process, state the Post Office mailing address of the company, and state the name and address of every general partner. The limited partnership is formed on the date of filing of the certificate unless a later date is specified in the certificate.4 1 VA. CODE ANN. § 50, Ch. 2.2. 2 VA. CODE ANN. § 50-73.11(A)(1). 3 VA. CODE ANN. § 50-73.2. 4 VA. CODE ANN. § 50-73.11(C)0). GENERAL PARTNERS General partners run the company's day-to-day operations and hold management control.
    [Show full text]
  • Effects of Partner Characteristic, Partnership Quality, and Partnership Closeness on Cooperative Performance: a Study of Supply Chains in High-Tech Industry
    Management Review: An International Journal Volume 4 Number 2 Winter 2009 Effects of Partner Characteristic, Partnership Quality, and Partnership Closeness on Cooperative Performance: A Study of Supply Chains in High-tech Industry Mei-Ying Wu Department of Information Management Chung-Hua University Hsin-Chu Taiwan, Republic of China Email: [email protected] Yun-Ju Chang Department of Information Management Chung-Hua University Hsin-Chu Taiwan, Republic of China Email: [email protected] Yung-Chien Weng Department of Information Management Chung-Hua University Hsin-Chu Taiwan, Republic of China Email: [email protected] Received May 28, 2009; Revised Aug. 14, 2009; Accepted Oct. 21, 2009 ABSTRACT Owing to the rapid development of information technology, change of supply chain structures, trend of globalization, and intense competition 29 Management Review: An International Journal Volume 4 Number 2 Winter 2009 in the business environment, almost all enterprises have been confronted with unprecedented challenges in recent years. As a coping strategy, many of them have gradually viewed suppliers as “cooperative partners”. They drop the conventional strategy of cooperating with numerous suppliers and build close partnerships with only a small number of selected suppliers. This paper aims to explore partnerships between manufacturers and suppliers in Taiwan’s high- tech industry. Through a review of literature, four constructs, including partner characteristic, partnership quality, partnership closeness, and cooperative performance are extracted to be the basis of the research framework, hypotheses, and questionnaire. The questionnaire is administered to staff of the purchasing and quality control departments in some high-tech companies in Taiwan. The proposed hypotheses are later empirically validated using confirmatory factor analysis (CFA) and structural equation modeling (SEM).
    [Show full text]