Value Enhancement through Value-creating Relational Investments in Inter-firm Relationships: The Moderating Role of Leverage Potential and Relational Polygamy
Article first published online: 28 JAN 2013
Copyright © 2013 John Wiley & Sons, Ltd.
Managerial and Decision Economics
Special Issue: Governance of Franchising Networks, Cooperatives and Alliances
Volume 34, Issue 3-5, pages 328–346, April-July 2013
How to Cite
Yaqub, M. Z. (2013), Value Enhancement through Value-creating Relational Investments in Inter-firm Relationships: The Moderating Role of Leverage Potential and Relational Polygamy. Manage. Decis. Econ., 34: 328–346. doi: 10.1002/mde.2593
- Issue published online: 8 APR 2013
- Article first published online: 28 JAN 2013
This study integrates and extends insights from transaction cost economics, value-exchange model, relationship quality model and dependence perspective to discuss the efficacy of value-creating relational investments in affecting certain revenue-enhancing (relational) behaviours in different contexts of supplier–intermediate buyer dyadic relationships. Specifically, it extends the literature by examining the moderating role of leverage potential and the extent of relational polygamy. On the basis of a data set of 284 dyadic relationships, it has been found that value-creating relational investments made by the focal suppliers in their (intermediate) buyers enhance relationship quality, which ultimately translates into an enhancement of revenues of the focal supplier firm(s) because the (intermediate) buyers exhibit certain revenue-enhancing behaviours such as prolonging their relationships, increasing their business share and generating positive word-of-mouth about the focal supplier(s). It has also been found that the effect of value-creating relational investments is partially mediated through the relationship quality. In addition, tests of moderating effects reveal that efficacy of the value-creating relational investments varies across different levels of leverage potential and/or the extent of relational polygamy exhibited by the intermediate buyers in their respective supplier portfolios. Copyright © 2013 John Wiley & Sons, Ltd.