The bright side of dependence asymmetry: Mitigating power use and facilitating relational ties

Abstract

Dependence asymmetry may trigger firms' common-interest orientation and suppress their self-interest seeking, thus generating positive effects on firms' behaviors in buyer–supplier relationships (BSRs). To further demonstrate the positive role and influencing mechanism of dependence asymmetry, we examine the impact of dependence asymmetry on buyer's use of power and relational ties. We also explore the moderating role of buyer's psychological contract fulfillment (PCF). We test the proposed relationships using polynomial regression and the response surface analysis based on data collected from 200 Chinese manufacturers. The results indicate that dependence asymmetry negatively affects buyer's use of power and positively influences relational ties directly and indirectly through decreasing buyer's use of power. Moreover, buyer's PCF negatively moderates the effect of dependence asymmetry on buyer's use of power and the indirect effect of dependence asymmetry on relational ties. This study contributes to dependence literature by identifying the bright side of dependence asymmetry and validating the mechanism of how dependence asymmetry influences behavioral outcome and relational factor. This study also enriches the literature on psychological contract by demonstrating the significant role of PCF in the context of interfirm relationships. Our findings provide insightful guidelines for firms to better understand interdependence structure and take appropriate actions when facing different interdependence structures.