Supplier Development Activities and Buying Firm’s Performance: An Empirical Investigation of Iranian SMEs

This study attempts to investigate the major antecedent factors that influence manufacturing SMEs intentions toward the implementation of supplier development activities in Iranian SMEs. In order to achieve this objective, the research constructs were developed. The conceptual framework underlying this study was based on the theories of supplier development activities and social capital.  These theories were merged and developed by adding some main variables after analyzing various key antecedents that were thought to be the influential factors that determined the intention of the manufacturing firms to adopt supplier development activities. A cross sectional method was used to gather data collected from 280 Iranian manufacturing SMEs. The measures and hypotheses were analyzed with the help of the Structural Equation Modeling (SEM). The research supported the idea that information sharing within firms, communication methods, top management support and trust between trading partners have positive influence on information sharing between firms. Furthermore, the research showed the positive effects of information sharing between firms on inventory management and product quality on buying firms.