Abstract

Trust has been a central construct in studies of inter-firm relationships. Many operational, organizational, social, and cultural factors have been identified to have significant impact on inter-firm trust. In this study, we investigate the role of information technology in generating inter-firm trust and the consequences of this trust in the context of supply networks. Using structural equation modeling techniques, our data show that the level of information systems integration among the partner firms in a supply network significantly impacts the trust among the firms which, together with the integrated information systems, explains more than half of the variances in information sharing and business process coupling in the network. Given the substantial evidence in the literature on the impact of information sharing and process coupling on supply chain performance, we conclude that information systems integration among the partners is critical to supply network performance. We also confirm that information systems flexibility and use of standards in information systems significantly contribute to the level of systems integration among the partners in supply networks as suggested in prior studies. Our findings extend the current literature on inter-firm trust by considering the role of information technology in addition to other important factors already identified.

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