Factors affecting the extent of electronic cooperation between firms: economic and sociological perspectives

Two prominent trends—more cooperative business partner relationships coupled with rapid advances in computer and communications technology—have given rise to new forms of electronic cooperation through interorganizational systems (IOS). In spite of this emerging electronic cooperation, existing literature is limited in its ability to pinpoint the core set of factors that determine the extent of the electronic cooperation between trading partners. By investigating the use of electronic data interchange (EDI) as the specific form of IOS that enables electronic cooperation, this paper identifies factors influencing the extent of EDI use in a dyadic retailer-supplier relationship. Drawing particularly on transaction cost theory and social exchange theory, we identify five variables (asset specificity, uncertainty, reciprocal investments, trust, and power) that are likely to be important in explaining the level of EDI use between a retailer and its suppliers. These variables are hypothesized to be associated with the extent of EDI use, in terms of volume and diversity, between the trading partners. We will empirically test the research propositions using multiple regression analysis with the data that will be collected from a mail survey of a nationally known retailer’s suppliers.