According to transaction cost theory, under buyer-seller relationship conditions of asset specificity, they have to choose vertical integration rather than outsourcing, the most efficient and preferable governance structure to safeguard against partner’s opportunism. Numerous studies have so far investigated transaction specific investments as safeguarding mechanisms. The studies, however, have come up with implications for outsourcing relationship performance in the presence of transaction specific investments. Moreover the effects of transaction specific investments were biased towards explaining the performance of either one rather than both of transaction partners. This study tried to investigate the relationship between three types of transaction specific investments and performances. Especially the study suggest that transaction specific investment in the buyer-seller context can be conceptualized in terms of three types, ‘physical asset TSI’, ‘business process TSI’ and ‘domain knowledge TSI’. And the study. And the study focused on vertical quasi-integration and joint operation performance as performance variables. In short, the purposes of the study are to investigate the effects of three types of TSIs on vertical quasi-integration and joint operation performance. The study derived a set of detailed hypotheses and tested them on the relationship between buyers and vendors in Korean discount store distribution channels in which various types of TSIs are actively occurring. To test the research model empirically, data were collected from 143 buyer-vendor dyads of a discount store company in Korea. Path analysis was used to test main effects of three types of TSIs and two group tests were used to test moderating effects of relational variables, such as vendor’s trust toward buyer, buyer’s distributive fairness, and buyer’s procedural fairness. In general, the results provided supports for the main effects while moderating effect tests showed different results. As expected, physical asset TSI and business process TSI had positive effects on vertical quasi-integration and quasi-integration also had a positive on joint operation performance. domain knowledge TSI, however, had no significant effect on quasi-integration. In addition, there were several interaction effects, such as physical asset TSI with vendor’s trust, physical asset TSI with buyer’s distributive fairness, and business process TSI with buyer’s distributive fairness in the relationship between TSIs and vertical quasi-integration. Buyer’s procedural fairness, however, had no interaction effects with all types of TSIs.