Governance mechanisms and total relationship value: the interaction effect of information sharing

Purpose: The objectives of this study are to examine how contractual and relational governance mechanisms influence total value created in a buyer-supplier relationship and to investigate how supplier's information sharing and information sharing asymmetry between two exchange parties differentially moderate these associations. Design/methodology/approach: The study is conducted with a sample of 110 buyer-supplier matched dyads in various industries in Vietnam. Findings: This study confirms that contractual governance and relational governance have curvilinear effects on total relationship value. Governance mechanisms have distinct interactions with supplier’s information sharing and information sharing asymmetry to influence total relationship value. Research limitations/implications: Future study could expand the sample to various countries to investigate the role of cultural factors in the effects of contractual and relational governance. Practical implications: The study draws implications for supplying managers about how to govern a relationship with a buying firm with which they are sharing information. It also provides implications about how to use contractual and relational governance to control the effects of supplier’s information sharing, information sharing asymmetry, on total relationship value. Originality/value: The study extends the information sharing literature by looking into the effect of supplier’s information sharing on both parties’ relationship value. It contributes to the governance literature by investigating curvilinear effects of contractual and relational governance on relationship performance