Buyer-supplier Relationships Research Articles

Designing an Applied Approach to Support Supplier Development Decisions in Buyer-Supplier Relationship Management

این پژوهش با الهام گرفتن از نتایج یک طرح مطالعاتی کاربردی، یک رویکرد سلسله­‌مراتبی جهت پیگیری فرایند توسعه تأمین‌کنندگان و حمایت از تصمیمات موجود در هر یک از مراحل آن ارائه‌ می‌کند. ابتدا، زمینه‌های تأمین نیازمند توسعه و سپس تأمین‌کنندگان واجد شرایط توسعه در هریک از این زمینه‌ها به کمک رویکرد تصمیم‌گیری چندشاخصه بهترین-بدترین مشخص می‌گردند. معیارهای شناسایی زمینه‌های تأمین و نیز تأمین‌کنندگان واجد شرایط توسعه به کمک مرور مطالعات پیشین و بهره‌گیری از نظرات خبرگان حوزه‌ی خرید استخراج‌شده‌اند. درنهایت، یک مدل ریاضی دو هدفه برای انتخاب و تخصیص برنامه‌های توسعه به هریک از تأمین‌کنندگان منتخب توسعه پیشنهاد شده است. اهداف مدل، بیشینه‌سازی درجه دستیابی به اهداف توسعه خریدار و بیشینه‌سازی ارزش خالص فعلی سبد توسعه (شامل برنامه‌های توسعه انتخابی برای تأمین‌کنندگان واجد شرایط توسعه) می‌باشند. نتایج محاسباتی و بینش‌های مدیریتی استخراجی بیانگر اثربخشی و کاربردی بودن رویکرد ارائه‌شده و توانایی آن در حمایت از تصمیمات توسعه تأمین‌کنندگان است.

Cooperative innovation with buyers: how subcontractors and non-subcontractors differ

ABSTRACT This article explores how the likelihood and determinants of cooperative innovation with buyers differ between two types of suppliers (i.e. subcontractors and non-subcontractors) due to heterogeneities in the supplier-buyer relationship and resources. It compares and integrates the relational view and the resource-based view (RBV) within the context of vertical cooperative innovation. It finds that the likelihood of cooperative innovation with buyers is higher for subcontractors than for non-subcontractors by analysing the data of Korean firms in the manufacturing sector. In addition, it finds that the status of subcontractors moderates the impact of factors affecting the likelihood of cooperative innovation with buyers. Specifically, the positive effect of process innovation competence on the cooperation likelihood is relatively greater for subcontractors. In contrast, the positive effects of product innovation competence and innovation appropriability are greater for non-subcontractors.

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

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.

Supply chains and the success of M&As: investigating the effect of structural equivalence of merging firms' supplier and customer bases

PurposeThis study investigates the extent to which structural equivalence between acquiring and target firms is associated with post-merger and acquisition (M&A) performance—a relationship that is proposed to be moderated by industry-level vertical relatedness between acquiring and target firms.Design/methodology/approachApplying social network analysis and regression, this study analyzes a buyer–supplier relationship network dataset of 279 M&A deals completed between 2010 and 2017 to test the hypotheses. Structural equivalence is measured as the proportion of common customers and suppliers between an acquiring firm and a target firm.FindingsSupporting a view about the importance of supply chains in explaining M&As outcomes, the results suggest that the structural equivalence in the supplier network is positively associated with post-M&A firm performance. The results also show that the effect of the structural equivalence in the customer network is moderated by vertical relatedness between two merging firms (i.e. structural equivalence contributes to post-M&A performance when vertical industry relatedness is high).Originality/valueThis study contributes to the M&A and supply network literature by investigating the performance implications of structural equivalence in supplier and customer networks, demonstrating the importance of taking a supply chain view when explaining M&As outcomes. Specifically, the authors suggest considering structural equivalence as a new type of relatedness between merging firms (i.e. relatedness in network resources in explaining post-M&A performance). It also indicates how industry-level vertical resource relatedness, which is about relatedness in internal resources between the two firms, could interact with firm-level network resource relatedness, which is about relatedness in external supply chain resources between the two firms, in affecting post-M&A performance.

Public procurement for innovation through supplier firms' sustainability lens: A systematic review and research agenda

AbstractPublic sector purchasing processes are gaining increasing prominence as a demand‐side innovation tool for addressing national sustainability challenges. Accordingly, there has been growing research attention to this topic. Prior studies suggest three key rationales that underlie the use of public sector procurement to drive innovation: (i) the buyer–user rationale (for creating new needs); (ii) the market/system failure rationale (for improving suppliers' capacity to innovate); and (iii) the public services rationale (for improving public services). However, operational activities at the upstream supply chain affecting the sustainable innovation capacities of supplier firms appear to be under‐researched in the public procurement for innovation (PPI) scholarship, despite knowledge about innovation capacity being critical to successfully implementing PPI. This paper adopts a systematic literature review approach to synthesise existing fragmented literature on sustainability‐oriented PPI, focusing on supplier perspectives. Findings from a synthesis of 41 relevant articles suggest, among others conditions, that a procurement framework that maintains a good balance of competition and innovation, builds buyer–supplier relationship and urges strong supply networks, maintains a stable political commitment, offers security for niche markets with effective innovation risk management culture would enhance suppliers' sustainability capacity and propensity to innovate. This paper contributes to the PPI literature and the literature on determinants of sustainable innovation systems from supplier firms' sustainability lens.

Asset specificity asymmetry and supplier opportunism in buyer–supplier exchanges

Despite the prominent role of asset specificity in buyer–supplier exchanges, its influence on opportunism remains controversial. While transaction cost economics (TCE) addresses its potential to encourage opportunism, relational exchange theory (RET) highlights its role in discouraging opportunism. We extend this debate by considering (1) the effects of asset specificity asymmetry, (2) changes in supplier opportunism over time, and (3) the moderating roles of supply market uncertainty and prior exchange history. We argue that the logics of TCE and RET are not fundamentally irreconcilable; instead, we suggest a perspective combining the calculative logic of TCE within the relationship logic of RET such that they jointly affect opportunism changes. Our propositions are supported by the results of a matched sample of 193 buyer–supplier relationships at two time points.

Optimum design of generalized adaptive sampling plan for solid supplier-buyer purchasing partnership with yield-driven validation

A flexible, effective scheme to operate successive lot disposition is critical for developing a solid supplier–buyer relationship. The consecutive lots' yields from in-control, automated manufacturing processes contribute substantial, valuable yield-record information. Feeding this information back into the inspecting compliances and decision criteria improves the sampling plans’ performance and supplier–buyer resources allocation. The existing multiple-lot dependent state plan (MDSP), however, engenders an adverse situation. It situates higher inspection costs and lower lot-sentencing standards when an increase of cumulative-lot yields considers in a lot-sentencing decision. This adversity significantly impacts a long-lasting supplier–buyer partnership. A recently developed adaptive MDSP (AMDSP) has resolved the adversity. But its sentencing rules administer a wide range of marginally satisfactory yields. To mitigate these, in this paper we propose a generalized AMDSP (GAMDSP) validated by the process yield-driven index. The process-yield-validated GAMDSP contains combinatorial mathematical treatment that activates its manufacturing traceability to historical lot-yield levels. When encompassing more preceding lot-yield histories in the decision, the GAMDSPs manifest the benefit of inspecting sample reduction. The GAMDSPs also increase the lot-acceptance yield standards and show lot sentencing with a narrow range of marginally satisfactory yields. Besides, they are sufficiently flexible. By manipulating their adaptive mechanisms, the GAMDSPs can convert into a specific sampling plan that is suitable for the different stages of supply chain management. Finally, a case study demonstrates the applicability of our proposed GAMDSPs.

B2B eWOM on Alibaba: Signaling through online reviews in platform-based social exchange

This study investigates the contemporary role of electronic word-of-mouth (eWOM) in business exchanges through buyers' signaling of observable and unobservable supplier characteristics on the Alibaba e-commerce platform. Utilizing a qualitative pre-study of 20 interviews (five buyer–supplier dyads with two interviews per firm) and more than 8000 buyer reviews on Alibaba, we identify characteristic patterns of this type of B2B eWOM.Signaling Theory and Social Exchange Theory underpin the empirical investigation. To enable further conceptualization, the study distinguishes between online B2B reviews based on the extent to which they are controlled by organizational partners. Unlike some other forms of B2B reviews, reviews on Alibaba are uncontrolled and comprise a form of eWOM.Findings indicate that the relational patterns of B2B eWOM shared on Alibaba can be aggregated into three categories: human touch, responsiveness, and resilience. Besides these new categories, the importance of product/service quality has been confirmed. Through Alibaba reviews, buyers' signals are sent not only to suppliers as feedback, but also to other prospective buyers to influence their purchase decisions.Our study aims to contribute to the B2B literature on eWOM and signaling in business relationships. By showing that human touch occurs even in online-only buyer–supplier relationships, the study provides evidence that bonding, the development of mutuality, and relationship intimacy in buyer–supplier relationships does not always require in-person contact. Managerial implications are offered with a focus on the signaling of unobservable qualities, such as human touch, with the help of B2B eWOM.

The impact of supply chain relationship configurations on supplier performance: investigating buyer–supplier relations in the aerospace industry

Purpose A supplier may sell not only to one buyer (sole relationship configuration) but also to the buyers competitors (shared relationship configuration) for a specific product category. This study examines the performance implications when suppliers establish shared relationships with the buyer’s competitors.Design/methodology/approach Secondary data are used to test hypotheses relating a supplier’s relationship configurations to its operational performance. A seemingly unrelated regression approach (SUR) is applied to analyze the data, followed by endogeneity checks of the empirical findings.Findings The study shows that suppliers with less-shared ties with buying firms’ competitors exhibit superior inventory efficiency and asset turnover. Thus, suppliers can improve operational efficiency by creating relatively exclusive, deep and trust-based relations instead of more extensively shared and shallower relationships.Research limitations/implications Based on agency theory as a theoretical lens and aerospace industry data, this research contributes by addressing the supplier’s perspective and linking its operational efficiency performance with its chosen supply relationship configuration.Practical implications Suppliers need to understand the performance implications of choosing relatively exclusive relationships versus shared relationships with buying firms. The research provides new insights for managers and can guide their supply chain decision-making.Originality/value Little is known about how a supplier’s relationship configurations can elevate, or impair, its operational efficiency. While conventional wisdom holds that suppliers should focus on multiple avenues of revenue growth by selling to buyers’ competitors, this study demonstrates that more sales to a buying firm’s rivals might, in fact, reduce a supplier’s efficiency.

Knowledge transfer, buyer-supplier relationship and supplier performance in agricultural supply chain: an agency theory perspective

PurposeThis paper aims to examine the performance of marginalized farmers in supply relationships with agri-tech firms in emerging rural agricultural economies. The complex relationship among the suppliers, dual relationship and knowledge transfer (KT) was studied. This paper empirically investigates the relationship between KT and supplier’s performance improvement (SPI) via buyer–supplier relationship (BSR).Design/methodology/approachGrounded on agency theory, a conceptual framework has been proposed to identify the mediation effect of BSR. The context deals with suppliers who are farmers in developing nations. The hypotheses were tested using confirmatory factor analysis and structural equation with a sample of 121 marginalized farmers from Indian states. The data was collected using a survey instrument designed by adapting the well-cited and validated measures. These marginalized farmers worked in collaboration with the agri-tech firms facilitating them with the KT.FindingsThe relationships established from the results also indicate the fact that KT is a powerful tool to make connections with farmers that lead to their performance improvement. The KT was found as a driver to improve performance (SPI) and the BSR acted as a positive mediator in this study. The complex relationships among the KT, BSR and SPI hold.Research limitations/implicationsThis paper can be subscribed to various nuanced understandings of the agricultural supply chain context in emerging economies, in the specialized cases where farmers belong to the marginalized communities. This study has the scope to replicate using a mixed-method approach in emerging economies beyond India. It also advances the agency theory literature in the supply chain discipline of emerging rural economies.Practical implicationsThis study offers strategic implications for agri-tech practitioners, policymakers and academic debate. The marginalized farmers with KT and improved BSR can become a part of the mainstream value chain, their debts can be reduced, suicides can be prevented and the quality of their family life can be significantly improved.Originality/valueThis study makes a unique contribution by investigating how the agri-tech firms (non-traditional buyer) and supplier relationship and KT helps improve the economic sustainability of smallholder farmers in India. The authors immersed themselves in fieldwork by interacting and meeting in person with 121 farmers residing in the remotest of the remote rural areas across multiple states of India. This resulted in the collection of authentic data and capturing the ground realities from one of the fastest-growing and largest emerging economies.

Public procurement as an attractive customer: a supplier perspective

PurposeBuyer–supplier relationships in public procurement have garnered increasing attention in research, yet studies on the perspective of suppliers on public procurement have remained limited. This research takes the perspective of suppliers and aims to investigate the innovativeness of suppliers and the impact of supply chain ambidexterity strategies on their perceptions about public procurement in terms of innovation enablers and customer attractiveness.Design/methodology/approachThis research draws from a survey of 137 suppliers to the public sector in Finland and applies PLS-path modeling to test its hypotheses.FindingsThe findings reveal that the ambidexterity strategy of suppliers in the supply chain influences how they perceive the innovation enablers and customer attractiveness of public organizations since processes of public procurement do not support these strategies fully. Supplier innovativeness has an influence on the perceived innovation enablers of public procurement, which, in turn, influences customer attractiveness.Practical implicationsThe innovativeness and strategies of suppliers for the supply chain have an impact on how attractive they perceive public procurement. The findings of this research provide insights on why the customer attractiveness of public procurement may not be high enough to secure the competition in their bidding processes.Originality/valueThe study’s contribution adds to the field of buyer–supplier relationships and customer attractiveness in public procurement by showing the importance of innovation enablers and highlighting the impact of supplier's ambidexterity in the supply chain on their perceptions about public procurement.

A quantitative analysis of governance structures in the world economy

In this article I explore a new quantitative approach for the analysis of buyer–supplier relationships in GVCs. Following the growing literatures of complex and social network analysis, I estimate the degree of hierarchicality of GVCs, taking into account the information of economic transactions between sectors in 190 countries of the world economy, gathered within the structures of the Global Multi-Regional Input-Output Tables of the EORA Database. In that way, I explore the spatiotemporal evolution of the hierarchicality of value-chains and provide a quantitative link between the buyer–supplier relationships of global industries and the categories of governance structures proposed by the respective theories. To the best of my knowledge, this paper is the first attempt to empirically map and quantify governance structures in the world economy.

Expanding the boundaries of buyer-supplier agency problems: Moving from dyad to triad

Extant agency theory addresses dyads consisting of a principal and an agent. It informs us about how to overcome agency problems in the buyer-supplier relationship. In this conceptual paper, we propose a theoretical argument that if we expand the boundary conditions from dyads to triads, we find new solutions to dealing with agency problems. To the buyer-supplier dyad, we add the supplier’s supplier, the buyer’s other supplier, the supplier’s other customer, and the buyer’s customer. As such, we consider four types of triads in supply chains and propose that the buyer as the principal could reframe agency problems with the focal supplier by moving to one of these triads. In particular, we investigate alternative mechanisms that may reduce the level of goal incongruence, information asymmetry, and power asymmetry in the buyer-supplier relationship. Our conceptualization suggests that supply managers should look outside the buyer-supplier dyad for additional opportunities to resolve agency problems.

A scenario-based experimental study of buyer supplier relationship commitment in the context of a psychological contract breach: Implications for supply chain management

Mutually beneficial long-term relationships between supply chain partners are the key to supply chain performance. However, these relationships may sometimes be undermined due to unforeseen events (e.g., supply chain disruptions). This study aims to originally examine the buyer-supplier relationship (BSR) commitment if the buyer's psychological contract is breached by the supplier. The study originally examines the effect of supplier-induced disruptions over a new product development project on the buyer's relationship commitment. It also evaluates the impact of the repair strategies employed by the supplier on the commitment to repair. These relationships are examined on two levels. First is the case where the buyer's focal manager has a cooperative or confrontational relationship with the supplier's focal manager. Second is the case where a prior (i.e., pre-disruption) relationship between the buyer and the supplier was collaborative or adversarial. We studied the research model using experimental methods on a sample of 204 supply chain managers from Pakistani industries. The results of this study show that the initial interpersonal and interorganizational relationships affected the response of the buyer when its psychological contract with the supplier was breached. The repair strategy of financial compensation is shown to have a considerable influence on repairing the commitment level of the buyer.

Innovation adoption in inter-organizational healthcare networks – the role of artificial intelligence

PurposeThis paper explores innovation adoption in inter-organizational healthcare networks. The authors develop theoretical speculations to investigate better the role of artificial intelligence (AI) as an innovative tool to improve buyer-supplier relationships, creating better performance outcomes.Design/methodology/approachThe research is based on a theoretical investigation aiming at exploring the role of AI-based solutions for managing buyer-supplier relationships. The conceptual approach allows us to identify some research streams (e.g. co-working collaborations in supply chain management) by proposing a matrix that helps clarify the analysis's directions.FindingsThe results show the importance of AI that can help the operator in accessing supplier information, including current prices, available stocks, and delivery status, thereby reducing the risk of information asymmetry. AI is intended not only as a technology tool but also as an innovative solution to promote business relationships and support vertical alliances through the value chain between buyer and supplier.Originality/valueThis paper can help healthcare actors examine the choices behind their operational strategies by providing transparency of the activities and availability of information in real-time. Finally, our study reflects the future directions to enhance the cooperation and innovation adoption among healthcare operators.

Building synergies between operations culture, operational routines, and supplier monitoring: implications for buyer performance

PurposePressured by various stakeholder groups to improve the sustainability performance of their emerging economy suppliers, multinational firms continue to expand their supplier monitoring. Leveraging the strategy literature on alliances and the buyer-supplier relationship management literature, the authors propose that a buyer firm's efforts to proactively develop cultural sensitivity and operations cognizance to understand the operational culture and routines of its suppliers can ameliorate some shortcomings of supplier monitoring, thereby improving the performance of the buyer firm.Design/methodology/approachUsing primary survey data from a sample of US manufacturing firms, combined with secondary data of supplier monitoring and financial performance, this research examines the relationship between supplier monitoring, cultural sensitivity, operations cognizance, and buyer firm performance.FindingsSupplier monitoring was associated with positive but diminishing returns for financial and sustainability performance for the buyer. Second, increasing cultural sensitivity and operations cognizance for suppliers in emerging economies were associated with improved buyer performance. Finally, the synergistic use of supplier monitoring and operations cognizance was associated with improved buyer firm financial performance.Originality/valueWhile the buyer-supplier relationship literature has mainly treated organizational differences between dyadic supply chain partners as exogenous to the context in which their relationship evolves, the authors posit that buyer firms' efforts to understand such differences can affect the value of buyer-directed interactions, such as supplier monitoring. This research adds to the theoretical understanding of the process of developing relational mechanisms with emerging economy suppliers. In particular, efforts of buyer firms to better understand the operational culture and routines of their suppliers can complement monitoring and are associated with a positive impact on performance.

Buyer–supplier relationships and environmental sustainability in developing regions: Field evidence from Zimbabwe's private telecommunication sector

There is increasing global call by various stakeholders on adherence to environmental sustainability. This need to adherence has prompted organisations to partner with suppliers to address the environmental sustainability agenda. The telecommunication sector is not excluded in this endeavour to push the frontier for environmental sustainability to greater heights. The purpose of this research is to give insights on the input of buyer–supplier relationships to intensify environmental sustainability going forward. The researcher used the questionnaire and interview guide from procurement practitioners in the private telecommunication sector. The empirical result revealed that transactional relationships have the greatest input in environmental sustainability as compared to both strategic alliances and collaborative relationships. Strategic alliances and collaborative relationships yielded positive results when dealing with key suppliers of strategic items. This research contributes to how procurement policy makers and practitioners can optimize telecommunication supply chains towards environmental sustainability for the future. Theoretically, this study shows how buyer-supplier relationships are key to intensify environmental sustainability, thus reducing environmental harm when put into practice.

The moderating influence of supplier culture on the relationship between buyer power and supplier shirking

AbstractGlobalization has added a layer of complexity to the challenge of mitigating opportunism in buyer–supplier relationships. When engaging with suppliers in different countries, buyers must manage relationships across various cultures. Prior empirical research has shown that inter‐firm power affects opportunism in exchange relationships, and conceptual studies suggest that national culture is a location characteristic that could influence inter‐firm power. However, no research has empirically examined the efficacy of inter‐firm power in controlling opportunism, or other exchange outcomes, across different cultural contexts. To study this relevant issue, we investigate how a supplier's national culture influences the effectiveness of two bases of inter‐firm power, coercive and expert power, on a form of opportunism that has been anecdotally observed in practice—supplier shirking. We utilize primary dyadic data on 109 outsourcing relationships and secondary data of supply chain location characteristics to examine this phenomenon. We find that the effects of inter‐firm power on shirking vary across suppliers in different cultures and that, in certain cultures, coercive power may reduce the effectiveness of expert power. Our results show that manufacturers must explicitly consider suppliers' national culture when managing a globally dispersed supply base or risk encountering supplier shirking.

Factors influencing structural power dynamics in buyer-supplier relationships: a power sources framework and application of the critical incident technique

Research background: Although the literature on power asymmetry and power dynamics has recognized the issue of factors that cause power shifts in business-to-business relationships, a more systematic approach and research framework regarding the identification of these factors is lacking. There are attempts in business-to-business literature to use the critical incident technique to study dynamic phenomena, but there are no studies on the factors that increase and decrease the power of suppliers in their relationships with dominant buyers. Purpose of the article: The aim of this paper is to identify the factors that influence the most significant changes in suppliers? power in relationships with dominant buyers. An important objective is also to determine to which power sources the identified factors are assigned. This is crucial for business practitioners, who will be able to adjust their actions when managing a relationship with a dominating partner through knowledge of their own strengths as well as weaknesses. Methods: The study is based on analysis of questionnaires with open-ended questions, and uses the critical incident technique to investigate the behaviour of dyadic parties at key moments in buyer-seller relationships. We have focused on investigation of manufacturing companies mainly from the furniture, construction, energy and printing industries. The analysis of the data was based on the abductive approach as a combination of inductive and deductive coding. Findings & value added: In comparison to previous studies, which did not distinguish the level of importance of each factor, we have obtained only those factors with the greatest impact on power dynamics. We have also obtained factors which can decrease suppliers? power, whereas the literature focuses mostly on factors increasing suppliers? power. The research results reveal the factors that affect an increase and decrease in the power of weaker suppliers in relationships with dominant buyers. First- and second-order factors were identified, and subsequently 3 overarching dimensions for each increase and decrease in supplier power were deduced from the results. The most important overall dimension for the increase in power was the building of suppliers' power capabilities, while the decrease in suppliers' power was most influenced by transactional changes and changes in buyer's expectations. The results can be helpful for managers in focusing their attention on expert power in order to gain knowledge and prepare a practical background for managing asymmetric relationships. It is important to mention that the critical incident technique used in this study has not yet been used to represent power dynamics in B2B relationship literature.

The Interplay Between Supplier-Specific Investments and Supplier Dependence: Do Two Pluses Make a Minus?

Supplier resources are critical to the success of downstream firms. The relational view and resource dependence theory predict how supplier-specific investments and supplier dependence make the supplier more willing to allocate its best resources to the focal buyer relative to other buyers. However, these theories are ambiguous regarding the interplay between these two constructs. Specifically, the combination could either create relational synergies that benefit the focal buyer or create a situation in which the supplier reconsiders its resource allocation decisions and potentially allocates its resources to the accounts of other buyers. We investigated these competing views by building on two independent dyadic datasets. We found positive effects for both a buyer's supplier-specific investments and supplier dependence on supplier resource allocation, which is measured as the supplier's allocation of physical and innovation resources to the focal buyer relative to competing buyers. However, we also found evidence that supplier dependence negatively moderates the effect of supplier-specific investments on supplier resource allocation. Hence, the effect of supplier-specific investments weakens when the supplier is dependent on the buyer's business volume. These findings make an important empirical contribution to the literature by clarifying the dual workings of supplier-specific investments and supplier dependence as mechanisms to influence supplier resource allocation. We discuss several implications for the buyer-supplier relationship literature and the broader management literature.