Seminar（Dept. of Trade Economics）

Title: Trust asymmetry and changes in supplier performance: an institutional view

Speaker: Mengyang Wang (Associate professor, School of Management, Huazhong University of Science and Technology)

Time: 10:00-11:30am, October 25th, 2022 (Tuesday)

Venue: Online Meeting

Language：English/Chinese

Abstract：

Despite the long recognition of the dyadic nature of interfirm trust, research on how trust asymmetry affects relationship outcomes is still limited. Drawing on extant literature, this study takes a dyadic view to investigate the effects of buyer trust asymmetry and supplier trust asymmetry on changes in supplier performance over time, and further examines the moderating roles of legal support and regulatory uncertainty. Based on the analysis of a two-wave survey of 229 buyer-supplier dyads in China, our study finds that when buyer trust is greater than supplier trust, trust asymmetry leads to a decrease in supplier performance over time; when suppliers trust more than buyers, trust asymmetry results in an increase in supplier performance. Moreover, in environments characterized by high legal support, the effect of buyer trust asymmetry become weaker. In addition, regulatory uncertainty magnifies the influence of buyer trust asymmetry while weakens the role of supplier trust asymmetry. These findings provide fresh insights into the dyadic nature of interfirm trust and offer important implications for trust research and better management of firm exchange relationships.