Impact of trust, asset specificity, and environmental uncertainty on manufacturing collaborative processes

Supply chain collaboration is usually taken as a strategic movement for manufacturers to increase the overall supply chain performance. However, the interrelationships among trust, asset specificity, and environmental uncertainty, as well as their influences on level of collaborative processes still remain unknown. This study empirically examines the impact of Trust, Asset Specificity, and Environmental Uncertainty on the level of Collaborative Processes practiced by manufacturing firms in Taiwan with their suppliers. Based on the data collected from 132 manufacturers, the structural equation modeling is used to analyze. It is found that Trust, Asset Specificity, and Environmental Uncertainty all positively affect the level of Collaborative Processes practiced by the firms with their suppliers. In addition, the results also show that Environmental Uncertainty positively affects Asset Specificity. Finally, it is observed that Asset Specificity positively impacts Trust of a firm in its supplier. This study provides useful insights for supply chain practitioner.