Impact of Social Capital on theBuyer-supplier Relationship in China

Abstract

The purpose of this research study is to assess the impact of social capital theory, developed primarily in the west, on buyer- supplier relationships and buyer performance within China. Survey data was collected from Chinese executives participating in Executive Management Business Administration programs. We used confirmatory factor analysis to validate the constructs and then ordinary least squared regression to test the model. Findings indicate that a good buyer supplier relationship (BSR) has a positive impact on the buying firm’s performance. All three dimensions of social capital (structural, relational, and cognitive) had a positive impact on the quality of the BSR. Structural, measured by socialization, exhibited a curvilinear effect within increasing returns on the quality of the BSR. Because of China’s large manufacturing base, many United States firms are looking to China for suppliers. The importance of conducting research in Asian cultures, such as China, continues to increase due to the rising influence of these countries in the global marketplace.