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The impact of trust and contract on innovation performance: The moderating role of environmental uncertainty

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  • Wang, Longwei
  • Yeung, Jeff Hoi Yan
  • Zhang, Min
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    Abstract

    Research into two important control mechanisms for managing the supply chain relationship - contracts and trust - is on the rise. However, our understanding of how they influence innovation in a firm remains rather unclear. Thus, the primary objective of this study is to examine the individual and interactive effects of contracts and trust on firms' innovation performance and the contingent effects of environmental uncertainty on those relationships in China. The empirical results from a survey of Chinese manufacturing firms indicate that there is a positive relationship between trust and firms' innovation performance, an inverted U-shaped relationship between the use of contracts and firms' innovation performance, and that contracts and trust are substitutes. Moreover, we find that environmental uncertainty enhances the effects of trust, but does not influence the impact of contracts on innovation performance.

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    Bibliographic Info

    Article provided by Elsevier in its journal International Journal of Production Economics.

    Volume (Year): 134 (2011)
    Issue (Month): 1 (November)
    Pages: 114-122

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    Handle: RePEc:eee:proeco:v:134:y:2011:i:1:p:114-122

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    Web page: http://www.elsevier.com/locate/ijpe

    Related research

    Keywords: Trust Contract Innovation Environmental uncertainty China;

    References

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    Cited by:
    1. Yeung, Kwong & Lee, Peter K.C. & Yeung, Andy C.L. & Cheng, T.C.E., 2013. "Supplier partnership and cost performance: The moderating roles of specific investments and environmental uncertainty," International Journal of Production Economics, Elsevier, Elsevier, vol. 144(2), pages 546-559.
    2. Jao-Hong Cheng & Chih-Ming Lee & Mu-Chung Chen, 2013. "Inter-Organizational Relationship and Innovation Performance in Electronic Supply Chains," Diversity, Technology, and Innovation for Operational Competitiveness: Proceedings of the 2013 International Conference on Technology Innovation and Industrial Management, ToKnowPress, ToKnowPress.

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