Generating Supplier Benefits through Buyer‐Enabled Knowledge Enrichment: A Social Capital Perspective

Abstract

ABSTRACTIn accordance with the tenets of social capital theory, the knowledge‐based view of the firm, and absorptive capacity theory we provide an integrative research model that sheds light on how suppliers can derive benefits from a strong relationship with key buyers. In particular, we examine three research questions that address: (i) the interrelationships among the three dimensions of buyer–supplier social capital (structural, cognitive, relational); (ii) the mechanism through which buyer–supplier social capital can influence supplier performance; and (iii) the contingency factors that influence the key relationships in the main model. We empirically validate the research model using data collected from a North America‐based major electronic components distributor (i.e., the buyer) and 166 of its suppliers. The findings of our data analysis indicate that structural and cognitive social capital influence relational social capital. The findings also support that relational social capital allows for the transfer of knowledge from the buyer to the supplier, which in turn leads to greater supplier cost efficiency and innovation. However, the influence of buyer–supplier relational social capital appears to be less important in lengthier buyer–supplier relationships. The analysis also indicates that the benefits derived from a supplier's knowledge enrichment are significantly greater when the supplier possesses greater exploitative capacity. These findings provide important extensions to theory describing buyer–supplier relationships, as well as providing clear prescriptions for suppliers and relationship managers.