Forms of supplier relationship exploration and distributor performance

Purpose: This study aims to differentiate two types of relationship exploration – substitute relationship exploration (SRE) and complementary relationship exploration (CRE) – and examine their effects on a distributor’s detection capability in relationship governance with upstream suppliers and innovation capability in services to downstream customers. Design/methodology/approach: The authors obtained 176 responses from distributors in the semiconductor industry in China. Structural equation modeling and hierarchical moderated regressions are used to test the hypotheses. Findings: CRE increases both detection and innovation capability, whereas SRE reduces detection capability and increases innovation capability. Market uncertainty weakens the effect of detection capability but strengthens that of innovation capability on distributor performance. Research limitations/implications: First, to the best of the authors’ knowledge, this study is among the first to differentiate SRE and CRE, thus enriching the relationship marketing literature. Second, drawing on information economics, the authors uncovered the differential effects of SRE and CRE on detection and innovation capabilities. Third, market uncertainty moderates the effects of the two capabilities on distributor performance. Practical implications: Distributors should be aware that there are different types of relationship exploration and, for that reason, should explore potential suppliers based on their business needs and firm conditions. The results of this study show that both SRE and CRE are beneficial for distributors’ innovation capability, but SRE reduces their detection capability. Practically, firms need to be aware of the trade-offs associated with different types of relationship exploration. Moreover, when market uncertainty is high, distributors should pay more attention to innovation than to detection capability building. Originality/value: This study conceptualizes and differentiates between two forms of relationship exploration. By linking them with distributors’ capability building and performance, the authors provide theoretical and practical implications.