The Roles of Competence Trust, Formal Contract, and Time Horizon in Interorganizational Learning

This study examines the roles of competence trust, formal contract, and time horizon on interorganizational learning. Two types of learning — knowledge accessing and knowledge acquisition — are first identified. I then evaluate the relative roles of competence trust and contract on these two types of learning. I further investigate how time horizon moderates their roles. The hypotheses are tested with a sample of 126 buyer—supplier relationships between the Hong Kong toy traders and their suppliers. The results show that knowledge accessing and knowledge acquisition have very different requirements on the competence trust and contract of an exchange relationship. These requirements also change with the time horizon of the relationship.