The impact of dependence and trust on supply chain integration

Purpose - The purpose of this paper is to investigate the joint influence of dependence and trust in supply chain relationships on supply chain integration (SCI) and financial performance. Design/methodology/approach - This study develops a dependence-trust-SCI-performance model and tests it using structural equation modeling based on empirical data collected from 617 manufacturers in China. Findings - The results show that trust with customers/suppliers significantly influences SCI. Although dependence on customers/suppliers has no direct effect on SCI, it improves SCI indirectly through trust with customers/suppliers. Both supplier integration and customer integration significantly improve financial performance. Practical implications - This study suggests that manufacturers should manage dependence and trust in supply chain relationships simultaneously to enable SCI. When there is high-level dependence on customers/suppliers, manufacturers should invest resources to develop trust with those customers/suppliers. Moreover, to achieve a better financial performance, manufacturers should integrate with both customers and suppliers. Originality/value - This study contributes to the literature by providing empirical evidence regarding the direct effect of trust on SCI, and the indirect influence of dependence on SCI through trust. This extends extant knowledge regarding the joint impact of dependence and trust on SCI. Hence, both researchers and practitioners should pay attention to interdependence among different relationship management practices. Moreover, this study also empirically supports the argument that SCI improves firms' financial performance.