Buyer-supplier relationships, transnational companies, competitiveness, determinants, NIPALS algorithm, PLS regression


Effective supplier-buyer relationship management should not be seen only in terms of cost and financial measures, as outlined by Transaction cost economics, but also in terms of other (“softer”) relational benefits, like e.g. more comprehensive information sharing, higher levels of trust, better cooperation and increased relationship flexibility. This second view is grounded in both Relationship marketing and Resource-advantage theory. Surprisingly, only a few research papers on supplier-buyer relationships address both of these perspectives equally, as well as in terms of long-term competitiveness (vis-avis a traditional short-term performance). The purpose of this paper is to analyze business relationship determinants of supplier-buyer relationship competitiveness, where we study the impact of (1) relationship-based information exchange, (2) network spillover effects, (3) transaction-specific investments, (4) trust, (5) cooperation (joint actions) and (6) flexibility on perceived (7) supplier-buyer relationship competitiveness. In this regard the main research question of our study is: Which relational and transactional dimensions determine supplier-buyer relationship competitiveness, as well as how strongly? To provide the answer this research question we employ an exploratory-type Partial Least Squares (PLS) regression in conjunction with a novel perspective of network spillover effects, as a set of independent variables in our model. The data set consists of a sample of 130 international suppliers (approx. 30 % response rate) connected to a transnational company (TNC) headquartered in Slovenia, which operates in the steel construction solutions’ industry. Our results clearly identify a relational and a transactional set of determinants of supplier-buyer relationship competitiveness, with the former having a significantly higher impact on competitiveness than the latter. With regards to specific dimensions associated with this relational component network spillover effects, as well as trust turn out to be key determinants of supplier-buyer competitiveness.