The purpose of this paper is to extend understanding of supplier development theory by investigating the relationships among communication methods, information sharing within a firm, information sharing between firms, and support aimed at supplier development and the effects these relationships have on firm performance.
Data were collected from a random sample of 231 firms are used to test hypothesized relationships by employing structural equation modeling.
The main findings indicate that traditional communication methods, information sharing within a firm, and information sharing between firms, and supplier development are significant factors for improving a buyer's performance though their indirect and direct effects on firm performance vary.
The model tested in this study should be reinvestigated by employing better developed measures of advanced communication methods. Furthermore, when investigating the relationship between supplier development and firm performance, future studies should include mode of supplier development approach – reactive versus proactive – as a variable.
The findings of this study provide insights into what makes supplier development activities effective for practitioners.
Although communication/information sharing has emerged in previously published studies as a critical factor in developing suppliers, an integrated research model that investigates the relationships among communication media, information sharing, supplier development activities, and buying firms' performance has not been offered. This is the gap filled by this study.
