Supplier’s Network Churn, Buyer-Supplier Embeddedness, and Transaction Price Outcomes

Pankaj Kumar, Agnieszka Urszula Nowinska, Hans-Joachim Schramm

Research output: Contribution to journalConference article in JournalResearchpeer-review

Abstract

Supply chain management and marketing scholars have extensively studied the benefits of long-term buyer-supplier relationships and exchange outcomes. They have assumed, however, the availability of complete information regarding the long-term viability of exchange partners. Highlighting the information frictions in partner evaluations and using a network lens, we theorize that the network churn of the supplier in question and the buyer- supplier embeddedness play a pivotal role in whether the focal buyer pays a ‘premium’ to the supplier in terms of the price per unit in an exchange. Using a dataset of 1,775 unique dyads formed by 160 buyers (shippers) and 249 suppliers (vessel owners or operators) during the 2000-2019 period in the container shipping chartering market, we find that a) supplier’s churn is negatively associated with the price per unit paid by the buyer, b) buyer-supplier embeddedness is positively associated with the price per unit paid by the buyer, and c) buyer-supplier embeddedness attenuates the negative influence of supplier’s churn. Our study makes a novel contribution in developing supplier’s churn, i.e., other buyer’s turnover in a supplier’s network from one period to the other, as a salient heuristic for a focal buyer’s decision-making.

Original languageEnglish
JournalAcademy of Management Proceedings
Volume2021
Issue number1
ISSN2151-6561
DOIs
Publication statusPublished - 1 Sept 2021
EventAnnual Meeting of the Academy of Management 2021 : Bringing the Manager Back in Management - Online, United States
Duration: 29 Jul 20214 Aug 2021
https://aom.org/events/annual-meeting

Conference

ConferenceAnnual Meeting of the Academy of Management 2021
LocationOnline
Country/TerritoryUnited States
Period29/07/202104/08/2021
Internet address

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