The interplay of drivers and deterrents of opportunism in buyer-supplier relationships

Fostering and maintaining buyer-supplier relationships is a fundamental premise of many channel initiatives. Indeed, these relationships may culminate in significant performance enhancements and competitive advantage. Yet these relationships may also result in competitively harmful events such as partner opportunism. Despite this potential competitive erosion, there is a lack of studies examining the interplay between the drivers and deterrents of opportunism. By building on transaction cost economics and social capital theory, we examine, via a sample of 400 manufacturing firms in China, how the interplay between drivers (relationship-specific investments and behavioral uncertainty) and deterrents (inter-firm social capital) of opportunism affect partner opportunism in buyer-supplier exchanges. The significance of this interplay between the drivers and deterrents sheds new light on how a firm can leverage social capital to curb the harmful effects of opportunism.