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The Impact of Information Sharing Under Opportunism in Supplier-Buyer Relationships: An Empirical Analysis  

Chang, Young Bong (School of Technology Management, UNIST (Ulsan National Institute of Science and Technology))
Cho, Wooje (School of Technology Management, UNIST (Ulsan National Institute of Science and Technology))
Publication Information
Journal of Information Technology and Architecture / v.9, no.4, 2012 , pp. 365-376 More about this Journal
Abstract
We examine the value of information sharing in the context of supplier-buyer relationships after controlling for trading partners' opportunism. Given that trading partners' opportunism is not randomly chosen, we explicitly incorporate their self-selection process into our estimation procedure by employing Heckman's self-selection model. According to our analysis, firms that have built safeguards via mutual trust, commitments and information sharing experience less opportunistic risk in supplier-buyer relationships. Our findings also suggest that information sharing has a positive impact on firm performance after controlling for opportunism. Further, firms that are less exposed to trading partners' opportunistic risk have achieved a higher performance than others that are more exposed. Importantly, higher performance for those firms with less opportunistic risk is driven by safeguards in supplier-buyer relationships as well as information sharing. Our findings can be applied for systems analysts to design information systems of supplier-buyer transactions.
Keywords
Supplier-buyer relationship; Information Sharing; Opportunism; Commitments; Trust; Transaction Cost Economics;
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