Manufacturing firms' credibility towards customers and operational performance: the counteracting roles of corruption and ICT readiness

Firms benefit from being reliable and trustworthy towards their customers. In many countries, however, corruption spills over to supply chain relationship practices and weakens a firm's credibility towards its customers (CTC). In this study, we investigate the influence of corruption on the rel...

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Bibliographic Details
Published in:International journal of logistics 2024-09, Vol.27 (9), p.1616-1632
Main Authors: Hu, Wenjin, Wagner, Stephan M., Shou, Yongyi
Format: Article
Language:English
Subjects:
corruption
Credibility towards customers
Customers
Empirical analysis
information and communication technology
Manufacturing
operational performance
ridge regression
supply chain relationship
Supply chains
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Summary:Firms benefit from being reliable and trustworthy towards their customers. In many countries, however, corruption spills over to supply chain relationship practices and weakens a firm's credibility towards its customers (CTC). In this study, we investigate the influence of corruption on the relationship between CTC and firm performance. Empirical analyses of manufacturing firms in multiple countries demonstrate that corruption diminishes the effect of CTC on firms' operational performance. Moreover, a country's information and communication technology (ICT) readiness can counteract the negative impact of corruption. Our study adds to the literature on supply chain relationship management by considering the influence of two institutional contingencies (i.e. corruption and ICT readiness) on the effectiveness of CTC as an important mechanism of supply chain governance. Our study complements the literature on transaction cost economics and urges managers to consider the two characteristics of their firms' institutional environments when managing relationships in their supply chains.
ISSN:1367-5567
1469-848X
DOI:10.1080/13675567.2023.2169666