Why Focal Firms Share Information? A Study of the Effects of Power and Information Technology Competence

Supply chain management has become an important issue for Taiwan’s manufacturing industry due to escalating global competition. Virtual vertical integration is an important issue in supply chain management. Because organizations only have limited resources, they pursue long-term partnership with specific transaction partners. They share information to improve visibility, speed responses to markets, and reduce costs from information distortion or information asymmetry. This study empirically explores the factors affecting inter-organizational information sharing from the perspective of focal firms. 1,000 questionnaires were administered to top 1,000 manufacturing companies in Taiwan, with 139 valid responses. The results show that partner’s power and relationspecific asset investments positively affect inter-organizational information sharing. On the other hand, the partner’s power does not significantly affect the organization’s relation-specific investments. This study further investigates the moderating role of information technology competence. The result indicates that when an organization has lower information technology competence, the relationship between the partner’s power and relation-specific investments is significant. Implications and discussion are then provided.

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