Contractual Dimensions and Buyer-Supplier Perceived Risk: the Moderating Role of Information Technology Integration.

Abstract

Contract is widely conceived as an effective approach to decrease risk perception and resolve disputes. However, previous literature on the link between contracts and risk perception is contradictory, wherein both positive and negative findings exist. This study provides a novel insight about the mechanism of contractual dimensions and considers the boundary conditions of information technology (IT) integration. Data collected from 225 retailers of a manufacturer support most hypotheses. Specifically, contractual complexity has positive influence on relational risk and contractual recurrence has negative influence on both performance and relational risk. This study further reveals the positive moderating effect of IT integration on the influence of contractual complexity on relational risk and the negative effect of IT integration on the influence of contractual recurrence on relational risk and performance risk. Implications and limitations of the study are discussed.