How does buyer-seller information sharing affect procurement quality performance? Insight from SMEs in a developing African economy

Abstract

Purpose Though extant literature proposes buyer–seller information sharing as a crucial variable for quality improvement, there is a dearth of empirical understanding of how it affects procurement quality performance. The present study aimed at addressing this knowledge gap by using small- and medium-scale enterprises (SMEs) in a developing African economy as an empirical context. Design/methodology/approach The research hypotheses are tested on survey data from 138 SMEs in Ghana using structural equation modeling. Findings Results show that buyer–seller information sharing is positively related to procurement quality performance and that high levels of buyer–seller information sharing lower procurement quality performance. Research limitations/implications Though the study demonstrates that there is a limit to the procurement quality performance benefit of buyer-seller information sharing, it does not empirically analyze the conditions that may relax this limit. Practical implications This research highlights both the bright and dark sides associated with buyer-seller information sharing and how they work out to determine procurement quality performance. It shows that SMEs could optimize procurement quality performance when they pursue a moderate level of buyer–seller information sharing. Originality/value This research advances the sparse literature on the procurement quality performance construct and its determinants within the context of SMEs. Unlike prior research that focuses on information technology, this study explicitly analyzes the role of information sharing in determining procurement (quality) performance and shows that differing levels of buyer–seller information sharing impact procurement quality performance differently.