Interpersonal and IT-enabled communication in platform transactions: the contingent role of contract completeness and technology usage

Abstract

PurposeThis paper assesses whether communication via interpersonal and IT channels accounts for short-term financial performance and long-term orientation and how these effects are influenced by contract completeness and technology usage in platform builder-platform participant relationships.Design/methodology/approachThe conceptual model and hypotheses are validated through a moderated regression of 384 survey responses from platform participant.FindingsThe empirical results indicate that interpersonal and IT-enabled communication contribute to both short-term financial gains and long-term orientation. The coexistence of interpersonal communication and IT-enabled communication has a synergetic effect on long-term orientation. Contract completeness positively moderates the effect of interpersonal communication on short-term performance while negatively moderating its effect on long-term orientation. Furthermore, contract completeness undermines the effect of IT-enabled communication on short-term performance. Technology usage enhances the effectiveness of interpersonal communication in generating long-term orientation.Originality/valueFirst, diverging from the extant research treating communication as a single dimension construct, this study differentiates communication on media channels and shows their separate and synergetic effects on short-term performance and long-term orientation. Second, our empirical findings indicate that the effects of communication are influenced by governance practices, which extends the communication literature. Third, previous studies have presented conflicting results concerning the role of governance mechanisms in inter-firm relationships. By showing that governance mechanisms also either support or suppress communication in generating performance for platform participants, this study extends the existing research on governance mechanisms. Finally, by regarding technology usage as a transactional governance mechanism, this study furthers our understanding of the role of technology in interfirm relationships.