2.1. Theoretical Development
Social exchange theory (SET) provides the primary theoretical basis for our theoretical model. SET is focused on recurring exchanges and enduring relationships that occur between partners [20
]. The supply chain literature has used SET to examine the buyer–supplier relationship, as it aids in understanding the value of relational norms in a relationship and a partner likely to transform the resources that are possessed to gain outcomes [21
]. Thus, for social exchange theory that is concerned with both the buyer and supplier, they must jointly participate in order to receive direct exchange [20
]. The research stream on social exchange theory can be traced back to early work that has been used to explain why firms are motivated on exchanges of value by actors that aim at maximizing their gains [21
]. In the supply chain context, the social exchange structure is based on the notion that the buyer–supplier relationship creates value and actors are engaged in joint decision making [20
]. SET has been studied in a supply chain relationship [21
]. Exchange structures include three kinds of exchange, namely productive exchange, direct exchange and generalized exchange. The distinction is based on the nature of the exchange relationship. For example, in productive exchange both buyers and suppliers engage in joint activity and receive benefits. In direct exchange, buyers and suppliers interact directly. Whereas in generalized exchange a third party establishes the exchange relationship between buyers and suppliers and hence indirect exchanges occur [20
2.2. Hypothesis Development
The current research on the buyer–supplier relationship demonstrates the importance of sustainability performance [24
]. Shafiq, Johnson and Klassen [25
] examined the impact of supplier social engagement on firm SPIs. Research tends to suggest that collaborative relationships impact the firm knowledge base and SPIs. According to Awan [26
], a governance model is rational on how firms achieve sustainability objectives. Similarly, Lee [27
] examined the relationship between responsible supply chains and supplier SPIs in the Asian context. Moreover, to meet the increasing demands of customers, employee and societal well-being, manufacturing firm’s capabilities are essential. Awan, Kraslawski and Huiskonen [28
] demonstrated that export firms’ capacity to improve social sustainability depends, in part, on the buyer’s understanding about supplier preferences towards achieving sustainability goals. There is a positive and significant relationship between supplier involvement and social sustainability performance [29
A positive association between external supply chain collaboration and social performance has already been identified [30
]. SPIs are a prominent part of many global initiatives in the field of supply chain management [31
]. Social sustainability practices in the supply chain contribute to improved health and safety, labor standards and employee well-being. Specifically, within the buyer–supplier relationship and based upon SET, recently, Carey, Lawson and Krause [32
] suggested that interaction allows buyers and suppliers to develop a better understanding of complex issues. Awan and Sroufe [33
] found positive effects of buyer collaborations on SPIs. The positive impact of buyer knowledge-sharing activities on firm performance is also evident in the literature. The buyers have the potential to share their knowledge with the supplier through a partnership, and thus the supplier’ firms become more capable in sustainability learning from their partners [34
]. Thus, we posited the following:
BDKTAs are positively associated with firms’ SPIs.
Knowledge acquisition is an important learning base for activities and plays key roles in achieving performance outcomes [35
]. It recognizes the acquisition of knowledge and providing training is a key factor related to improving the learning [36
]. A recent study of Aragon, Jiménez and Valle [37
] remarked that firms that implement a set of best knowledge activities can achieve better SPIs. The acquisition of new knowledge depends on several factors, including internal capabilities [38
], employee qualifications [39
], the extent of a firm’s education and training programs [40
] and firms’ external cooperation with buyers [41
]. Therefore, integrative learning is not only embedded in the skills and experiences of employees but also is deeply embedded in routine interactions with external partners.
In a buyer–supplier relationship, the supplier firm needs to recognize what knowledge and resources enable the supplier to enhance SPIs. Firms’ learning capabilities and collaboration facilitate learning and promote knowledge acquisition [41
]. The buyer knowledge-driven activities were reported to contribute to firm performance [4
]. Furthermore, social exchange theory also suggests that direct exchanges are essential as they drive access to resources and knowledge, which is not available internally [20
]. Based on these arguments, we posited:
BDKTAs are positively associated with supplier knowledge acquisition capability.
Supplier knowledge acquisition capability mediates the relationship between BDKTAs and SPIs.
The investment in social and environmental programs is strategically crucial for the manufacturer [42
]. Investment in the environment refers to the investment in environment (pollution and waste reduction) and social aspects (work place health and safety) of organizations [43
]. By investing in environmental factors organizations attempt to reduce the negative environmental impacts and by investing in social factors tries to improve the health and safety of the workplace. Research has considered the effects of social and environmental investments at the plant level in environmental and safety practices [44
]. The purpose of investing in the environment and social practices is to provide a safer working environment for the employees and to minimize the risk associated with the infrastructure. Given these arguments, our study proposes that investment in environments partially mediates the effect of BDKTAs on SPIs. The ability to exploit the resources composed of BDKTAs constitutes an important factor for firms, not only to enhance their SPIs. Thus, we posited that:
BDKTAs are positively associated with investment in environmental management.
Investment in environmental management mediates the relationship between BDKTAs and SPIs.
provides a theoretical background and develops the relationships that underline the conceptual model.
2.3. Research Setting and Data Collection
This study is a quantitative research study with a survey as the primary research strategy. A questionnaire was the main data collection tool to collect the data. We tested our hypotheses by collecting data from the export industry of Pakistan from four manufacturing industries, namely textiles and clothing, sports, surgical and leather. These four sectors contribute to more than 60% of the total exports of Pakistan. These sectors are the backbone of the country’s economy and frequently make use of partnerships, in terms of buyers and suppliers, across borders to access new knowledge resources. The sample of 650 firms was drawn from 1152 registered firms with the Federation of Chamber of Commerce and Industry, Pakistan. In total, 239 questionnaires were considered for analysis due to missing values and other factors in the collected 257 responses.
This study employed the Krejcie and Morgan [45
] approach for deciding the appropriate sample size for this study. The parameter shows that a minimum of 310 samples was necessary for a population of 1152 export manufacturers. Considering the characteristics of the manufacturing firm’s population, random sampling was adopted. We sent the survey using postal mail services to 650 firms with cover letters and a return postal envelope. We followed the guidelines of Salant and Dillman [46
] for the mailed questionnaire. We made follow-up calls to the firms that had not responded after the three-week first mailing. After three weeks, our follow-up calls increased the survey response collection. To reduce the bias, in the cover letter, we clearly explained and mentioned that we would not provide this information to a third party, and that we would use all the information for academic research purposes only. We made a telephone call to each firm who did not respond initially after the first three weeks, and we received a total of 239 responses. We used a t-test to assess whether the earlier and later respondents were significantly different. We did not find any difference between the late and early respondents. We have provided information in the text. The following item, "We actively engaged in supplier evaluation of training and education opportunities" with a factor loading of 0.478 was deleted.
The data was collected form export manufacturing firms with survey questionnaires (Appendix A
). The construction and measures of items were adapted from previous research studies (See Table 1
). To assess the common method variance (CMV), Harmon’s one-factor test [47
] was carried out. The result shows that the first factor captured only 31.6% of the variance. Overall, CMV was not a serious concern in our research.