The impact of boundary conditions on the relationship between value creation and value appropriation in buyer-supplier relationships

Abstract

Purpose

This study aims to investigate whether higher value creation leads to higher value appropriation and to identify the boundary conditions in a buyer–supplier relationship that can explain why a particular supplier can appropriate higher value than others.

Design/methodology/approach

The study uses questionnaire surveys. The sample of the survey has 150 publicly-listed supplier firms in Taiwan. The unit of analysis is the buyer–supplier relationship.

Findings

In the buyer–supplier relationship, suppliers’ bargaining power, partnership and a supplier’s original brand manufacturing (OBM) business can strengthen the positive relationship between value creation and value appropriation.

Research limitations/implications

This study adopts the unilateral viewpoint of suppliers; however, some constructs might require dyadic evaluation. This study only explores the spillover effect of OBM business on the relationship between value creation and appropriation.

Practical implications

The spillover effect of a supplier’s OBM business in a buyer–supplier relationship allows the buyer to share more common benefits and the supplier to capture more private benefits as compensation. By broadening its customer base, a supplier can increase its bargaining power. A supplier can also maintain a strategic partnership with each essential buyer.

Originality/value

To avoid the dark-side effect of partnership, the model provides the contingency that a supplier can capture more value from a buyer–supplier relationship.

Citation

Huang, M.-C., Lin, T.-C., Lin, P.-H., Chiu, Y.-P. and Chung, C.-H. (2023), "The impact of boundary conditions on the relationship between value creation and value appropriation in buyer-supplier relationships", Journal of Business & Industrial Marketing, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JBIM-06-2022-0241