Governance mechanisms and total relationship value: the interaction effect of information sharing

Abstract

Purpose

The purposes of this study are to examine how contractual and relational governance mechanisms influence total value created in a buyer–supplier relationship and to investigate how supplier’s information sharing and information sharing asymmetry between two exchange parties differentially moderate these associations.

Design/methodology/approach

The study is conducted with a sample of 110 buyer–supplier matched dyads in various industries in Vietnam.

Findings

This study confirms that contractual governance and relational governance have curvilinear effects on total relationship value. Governance mechanisms have distinct interactions with supplier’s information sharing and information sharing asymmetry to influence total relationship value.

Research limitations/implications

Future study could expand the sample to various countries to investigate the role of cultural factors in the effects of contractual and relational governance.

Practical implications

This study draws implications for supplying managers about how to govern a relationship with a buying firm with which they are sharing information. It also provides implications about how to use contractual and relational governance to control the effects of supplier’s information sharing and information sharing asymmetry, on total relationship value.

Originality/value

This study extends the information sharing literature by looking into the effect of supplier’s information sharing on both parties’ relationship value. It contributes to the governance literature by investigating curvilinear effects of contractual and relational governance on relationship performance.

Citation

Luu, N., Cadeaux, J. and Ngo, L.V. (2018), "Governance mechanisms and total relationship value: the interaction effect of information sharing", Journal of Business & Industrial Marketing, Vol. 33 No. 5, pp. 717-729. https://doi.org/10.1108/JBIM-08-2017-0191