Governing buyer-supplier relationships through transactional and relational mechanisms: Evidence from China

Building on economic and social exchange theories, this study investigates the different roles transactional and relational mechanisms have in hindering opportunism and improving relationship performance in an emerging economy. Our study applied to manufacturer-distributor dyads in China and used matched survey data (225 paired sample firms) to test our hypotheses. Our hierarchical multivariate regression and semipartial correlation analyses suggest that transactional mechanisms are more effective in restraining opportunism while relational mechanisms are more powerful in improving relationship performance. This performance is improved more significantly when both contracts and relational norms are used jointly than when used separately. Likewise, opportunism is curbed more effectively when both contracts and trust are used jointly than when used individually.