The interaction of dependence and trust in long-term industrial relationships

It has been noted in the literature on inter-organisational relationships that long-term cooperation is more effective in a business environment characterised by interdependence, commitment and trust. However, there is not enough knowledge about the effect of interdependence in different trust contexts. This paper draws on several theoretical contributions to examine the interaction of economic and social factors as determinants of industrial buyer-seller relationships. In order to test the proposed hypotheses information was collected relating to supplier-manufacturer relationships in the automotive industry. As expected, the empirical results indicate that trust moderates the effect of interdependence on the relational orientation of the exchange in that it enhances the relational orientation perceived by both manufacturer and supplier. A discrepancy was also found between suppliers' and manufacturers' relationship perceptions. The theoretical and managerial implications of the results are also discussed.