Social capital, joint knowledge creation and relationship performance in buyer-supplier relationships

Abstract

ABSTRACT Extant studies have shown that despite the seemingly beneficial outcomes of social capital, its impact on buyer-supplier relationships could sometimes be detrimental. This study contributes to a scholarly understanding of the mechanism via which the positive outcome of social capital in realised in buyer-supplier relationships. Drawing on the knowledge-based view of the firm, we theorise and provide empirical support for our thesis that joint knowledge creation acts as a conduit through which social capital enhances relationship performance. We used survey data from 113 construction firms in Ghana to test our propositions using the partial least squares structural equations modelling algorithm. Our findings show that social capital, in all its three dimensions contributes to joint knowledge creation in buyer-supplier relationships. Additionally, the relationship between social capital and relationship performance is mediated by joint knowledge creation. The theoretical and practical implications of these findings are discussed in the paper.