Inter-firm cooperation and IOS deployments in buyer-supplier relationships: A relational view

Inter-firm cooperation has gained importance in the context of buyer-supplier relationships. Trading partners often build inter-firm relationships to combine valuable resources and knowledge in order to achieve superior long-term performance. Inter-firm relationships require trading partners make relation-specific investments and build initiatives that facilitate and maintain buyer-suppler cooperation. They also need inter-organizational systems (IOS) to electronically support inter-firm transactions. Drawing on the relational viewpoint, this study explores the roles of four types of relation-specific investments that facilitate buyer-supplier partnerships: relational capital, collaborative know-how, partner-specific absorptive capacity and IOS deployments. A research model is developed and empirically tested using data collected from Taiwanese manufacturing industries. With a Partial Least Square (PLS) analysis, this study finds that: 1) both partner-specific absorptive capacity and IOS deployments have direct enhancing effects on cooperative performance; 2) relational capital directly benefits partner-specific absorptive capacity as well as directly and indirectly promote cooperative performance; 3) apart from having a strong, indirect impact on cooperative performance, collaborative know-how has strong, direct effects on various factors, including relational capital, IOS deployments and partner-specific absorptive capacity.