How Supplier Economies of Scale Drive Supplier Selection Decisions

• DOI: 10.1111/jscm.12203
• Publication Date: 2019-04-06T09:35:48Z
• Authors: Florian Badorf; Stephan M. Wagner; Kai Hoberg; Felix Papier
• Keywords: Supplier relationship management

Supplier selections are complex but nonetheless strategically important decisions that influenced by numerous factors. Drawing on the resource‐based and relational view of firm, we investigate how suppliers’ economies scale influence buyer's selection decision, illustrate is contingent upon economic, buyer, relationship characteristics. We test model with a large secondary dataset actual supplier from automotive industry show have strongly positive diminishing effect buying firm's decision. These effects reinforced or extenuated characteristics, characteristics more specific to buyer‐supplier situation (e.g., duration power balance) having stronger moderating than do global economic cycle). Our research helps suppliers better understand manage probabilities buyers provides firms understanding contextual factors affect benefit supplier‐provided scale.