Firm performance in digitally integrated supply chains: a combined perspective of transaction cost economics and relational exchange theory

Abstract

Purpose This paper aims to examine how interfirm transactional and relational assets drive firm performance (FP) in digitally integrated supply chains. Design/methodology/approach The authors combine the Transaction Cost Economics (TCE) and Relational Exchange Theory (RET) frameworks to hypothesize that FP will be a function of Asset Specificity (AS), Digital Technology Usage (DTU) and Collaborative Information Sharing (CIS). In addition, the authors hypothesize that Supply Chain Integration (SCI) will partially mediate the effect of DTU and fully mediate the impact of AS and CIS on FP. A cross-sectional survey of supply chain managers is used to test the hypotheses. Findings Findings indicate that specific investments in digitally integrated supply chains would increase FP. In addition, SCI fully mediates the relationships between AS and FP and CIS and FP, while SCI partially mediates the influence of DTU on FP. Practical implications Managers could strategically engage in the technologies that effectively fit within the firm’s supply chain strategies and seek to develop a pragmatic expertise that enables the effective use of technology in a comprehensive setting. Originality/value The study enriches the extant literature by incorporating TCE and RET as contradictory viewpoints on AS and investigating how transactional and relational assets affect FP in digitally integrated supply chains.