Factors affecting trading partners’ knowledge sharing: Using the lens of transaction cost economics and socio-political theories

Knowledge sharing allows trading partners to orchestrate the operation of supply chain and capture positions of advantage. Yet, lack of knowledge sharing has been consistently found to be the most critical failure factor in supply chain management. This paper intends to study the factors affecting trading partners’ entering knowledge sharing ties. Drawing upon transaction cost economics and socio-political theories, we developed our research framework. The hypotheses derived were tested by data collected with six medium-sized companies. Data analysis showed that socio-political factors were more robust in affecting the focal firm’s decision on whether to share knowledge with a particular partner. In particular, trust towards the partner and the partner’s power were the primary factors leading the firm to enter the knowledge sharing ties. In contrast, asset specificity did not play an important role in affecting the firm’s knowledge sharing decision. Theoretical contribution and practical implications are discussed.