Enduring buyer–supplier relationship and buyer performance: the mediating role of buyer–supplier dyadic embeddedness and supplier external embeddedness

Abstract

Purpose – The purpose of this research is to investigate the causal mechanisms that explain the relationship between the long-term buyer–supplier relationship and buyer performance. Building on the growing body of research on social capital in supply chain management (SCM), the authors examine how a buyer achieves superior performance in forming the enduring partnership with a supplier through two different forms of supplier embeddedness: buyer–supplier dyadic embeddedness and supplier external embeddedness. Design/methodology/approach – The bootstrapping method is utilized in data analysis to examine the mediating effects of the two different forms of supplier embeddedness simultaneously on the linkage between the duration of buyer–supplier relationships and buyer performance outcomes. Findings – The authors find that the two forms of supplier embeddedness serve as distinct conduits for the buyer to translate the long-term buyer–supplier relationship into performance effectiveness. Notably, dyadic embeddedness only mediates the linkage between the duration of buyer–supplier relationships and buyer economic performance, while supplier external embeddedness solely mediates the linkage between the duration of buyer–supplier relationships and buyer innovation performance. Originality/value – This study empirically demonstrates that different forms of supplier embeddedness may benefit a buyer differentially when directed at distinct performance goals. If a buyer can leverage both buyer–supplier dyadic embeddedness and supplier external embeddedness, the buyer will overcome value creation limitations of social capital from a single source, obtaining more comprehensive performance benefits sought by developing long-term buyer–supplier relationships.

Keywords

• Buyer–supplier relationship
• Dyadic embeddedness
• Supplier external embeddedness
• Buyer economic performance
• Buyer innovation performance