The moderating effect of buyer purchasing strategy on the relationship between supplier transaction-specific investment and supplier firm performance

Abstract

This study examines whether the type of buyer relational strategy (competitive or cooperative strategy) moderates the relationship between supplier transaction specific investments (TSIs) and buyer commitment, and whether the type of buyer cost reduction strategy (purchase price-based strategy or total cost-based strategy) moderates the relationship between buyer commitment and supplier performance outcomes. Data were collected through a survey of purchasing managers at 248 buying firms in Korea. Results indicate that supplier TSIs positively affect supplier firm performance through buyer trust and commitment. The influence of supplier TSIs on buyer commitment depends on which relational strategy buyers use and the influence of buyer commitment on supplier firm performance depends on which buyer cost reduction strategy is used.