Decisions about the degree of channel integration are a critical component of any manufacturer's marketing channel strategy. At one extreme, the manufacturer can integrate forward and perform the distribution function itself, by establishing a sales subsidiary. At the other extreme, the manufacturer can choose not to perform this function, using, instead, independent distributors (Klein, Frazier, and Roth 1990; Aulakh and Kotabe 1997). Over the last 30 years, transaction cost theory (TCT),

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... sed by Oliver Williamson (1975Williamson ( , 1985Williamson ( , 1986Williamson ( , 1999, has emerged as one of the dominant theoretical lenses through which to explain channel integration decisions (cf. John and Reve 2010; Rindfleisch et al. 2010). Empirical studies have provided considerable support for TCT's hypothesized effects on asset specificity; that is, the specificity of asset distribution has a positive impact on the degree of channel integration (e.