Strong buyer-supplier relationships lead to supplier innovation and cost efficiency.
Suppliers can benefit from strong relationships with key buyers by gaining knowledge and improving performance. The study looked at how different types of social capital between buyers and suppliers affect supplier performance. They found that structural and cognitive social capital influence relational social capital, which allows for knowledge transfer from buyers to suppliers, leading to cost efficiency and innovation. However, this influence is less important in longer relationships. Suppliers benefit more from knowledge enrichment when they have greater exploitative capacity. These findings offer insights for suppliers and relationship managers in improving buyer-supplier relationships.