The effect of supplier's market orientation on manufacturer's trust

Recent studies show that manufacturing firms can select suppliers according to suppliers' market-oriented behaviors. Based on market orientation literature and research on inter-firm relationships, a model is developed to examine the impact of supplier's market orientation on manufacturer's trust. The framework is tested using Structural Equation Modeling and the data are from dyadic manufacturer and supplier relationships in U.S. firms. The results show that supplier's market orientation is significantly related to manufacturer's trust, which affects the manufacturer's long-term orientation toward the supplier. Discussions and implications for managers are presented at the end of the article.