【Abstract】The effectiveness of contracts is bounded by the institutional environment in which they are designed and enforced. When firms form supply chain partnerships in emerging markets, they may experience contract ineffectiveness, which is defined as a firm's perceived limits of contracts with respect to safeguarding interests and coordinating activities. Specifically, we identify two institutional factors that may give rise to contract ineffectiveness, information transparency and legal enforceability, as they determine how effectively a firm designs and enforces a contract. In addition, we reveal that contract ineffectiveness prompts a firm to seek social ties, including business ties and political ties, to overcome the institutionally induced limits of contracts. These efforts, however, are moderated by the type of predominant pressure a firm bears. While equity pressure strengthens the relationship between contract ineffectiveness and a firm's pursuit of social ties, efficiency pressure weakens this relationship, because seeking social ties imposes an extra burden of efficiency. Tested by data collected from 187 distributors in China，our study reveals the institutional causes and the consequences of contract ineffectiveness, which is a common problem encountered by firms when forming supply chain partnerships in emerging markets.

　　【Keywords】Contract ineffectiveness;Information transparency;Legal enforceability;Efficiency pressure;Equity pressure;Social ties

　　 寿志钢教授系本文第一且通讯作者。

　　本文于2016年9月发表于Journal of Operations Management, 46（6）: 38-54。该杂志为SSCI源期刊，系国际公认的商科顶级期刊，入选UTDallas 24权威期刊目录，我院认定其为A-类。该期刊同时被SCI检索，属于SCI一区top期刊，2015－2016年影响因子为4.00，5年影响因子为8.229。