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The varying impact of buyer and supplier expected relationship-specific investments on relationship governance

Imran Khan (Management and Marketing Department, College of Business, Louisiana State University, Shreveport, Louisiana, USA)
Meike Eilert (Department of Marketing and Supply Chain, Gatton College of Business and Economics, University of Kentucky, Lexington, Kentucky, USA)

Journal of Business & Industrial Marketing

ISSN: 0885-8624

Article publication date: 23 September 2020

Issue publication date: 25 May 2021

303

Abstract

Purpose

The purpose of this paper is to investigate the differential influence of buyer and supplier relationship-specific investments (RSI) on a buyer’s relationship governance decisions.

Design/methodology/approach

Based on transaction economics and social exchange theories (SET), the authors develop a framework to understand how and when buyer and supplier RSI influence governance decisions. This model was tested using a survey of 301 Information Technology (IT) procurement professionals across a multitude of industries.

Findings

This research shows that buyer and supplier RSI impact governance decisions differently. Supplier investments are positively associated with relationship formalization when goals between both parties are shared. Buyer investments are more strongly related to formalization in technologically uncertain environments.

Originality/value

This research adds to the literature by integrating arguments from both transaction cost and SET to hypothesize why buyer and supplier investments have a differential impact on relationship governance decisions. In line with these arguments, it ultimately demonstrates conditions that render such investments more/less influential.

Keywords

Acknowledgements

The authors contributed equally to this manuscript. The authors would like to thank the anonymous review team for their helpful feedback during the review process.

Citation

Khan, I. and Eilert, M. (2021), "The varying impact of buyer and supplier expected relationship-specific investments on relationship governance", Journal of Business & Industrial Marketing, Vol. 36 No. 6, pp. 905-916. https://doi.org/10.1108/JBIM-12-2019-0548

Publisher

:

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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