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.
|Academy of Management Proceedings
|Published - 1 Sept 2021
|Annual Meeting of the Academy of Management 2021 : Bringing the Manager Back in Management - Online, United States
Duration: 29 Jul 2021 → 4 Aug 2021
|Annual Meeting of the Academy of Management 2021
|29/07/2021 → 04/08/2021