What specific investments are critical in fostering buyer‐supplier relationships: Evidence from MSMEs in emerging economies

Abstract

AbstractMSMEs (Micro, Small and Medium enterprises) play a vital role in the development of emerging economies, and their interactions with state‐owned enterprises can generate significant economic value for both parties. However, the dependency asymmetry between MSMEs and state‐owned enterprises can hinder their growth and overall relationship performance. This research explores the impact of various dimensions of relationship‐specific investments (RSIs) on fostering trust and satisfaction in these relationships. Additionally, the study investigates the moderating role of bilateral communication in the relationship between RSIs and satisfaction through trust. The conceptual model was assessed using a sample of 157 MSMEs, employing partial least squares structural equation modelling and necessary conditions analysis. The findings suggest that communication is crucial in building trust and satisfaction within these relationships. The literature has not extensively explored the context of these relationships and the application of necessary condition analysis, making this study valuable for policymakers. By understanding the factors that contribute to successful relationships between MSMEs and state‐owned enterprises, policymakers can create targeted strategies to support and enhance these interactions, ultimately fostering the growth and development of emerging economies.