Relationship stability and supplier commitment to quality

Abstract

This study explores the link between relationship stability and supplier commitment to quality, and the contingency of the link on characteristics of transactions within the framework of transaction cost analysis. Data collected from 358 suppliers of a globalized firm suggest that supplier firms regard a stable relationship as being positively linked to their commitment to quality for the focal buyer firm. It was also found that the link is stronger when the suppliers' perceptions of a certainty of supply with the buyer firm are greater, while asset specificity and transaction frequency have no impact on the link. A discussion of the results and of the implications of the findings is provided.