Diversity in Business-to-Business Information Exchange: An Empirical Analysis of Manufacturers and their Trading Partners

This study uses transaction cost economics to examine the specific characteristics of information exchange that affect performance in industrial supply chains. Hypotheses are developed and tested. The first is that there is more information exchange as a firm increases its performance. The second is that the diversity of information exchange is also positively associated with firm performance. The data for the study was collected as part of a larger study. It was gathered from an electronically mediated industrial exchange network. Distinct information exchange characteristics can be captured at the firm level. An ordinary least square (OLS) model shows a good statistical fit for the data. It also demonstrates a high explanatory power for the model. The first hypothesis had a positive result. However, the second did not. Information diversity and firm performance was not supported. Firms that exchanged more types of information with trading partners experienced lower inventory turnover. A number of explanations for the discrepancy are offered, but further investigation is needed. Other sectors of the supply chain could be tested, or additional qualitative data could be gathered.