MODERATING ROLES OF INFORMATION TECHNOLOGY LINK AND INFORMATION SHARING IN DRIVING SUPPLY CHAIN PERFORMANCE THROUGH SUPPLIER DEVELOPMENT AND KNOWLEDGE ABSORPTION: EMPIRICAL EVIDENCE FROM MANUFACTURING FIRMS ACROSS COUNTRIES

118 2022, XXV, 4 Business Administration and Management 10.15240/tul/001/2022-4-008 MODERATING ROLES OF INFORMATION TECHNOLOGY LINK AND INFORMATION SHARING IN DRIVING SUPPLY CHAIN PERFORMANCE THROUGH SUPPLIER DEVELOPMENT AND KNOWLEDGE ABSORPTION: EMPIRICAL EVIDENCE FROM MANUFACTURING FIRMS ACROSS COUNTRIES Anh Chi Phan1, Ha Thu Nguyen2, Hao Anh Nguyen3, Yoshiki Matsui4 1 Vietnam National University – University of Economics and Business, School of Business Administration, Vietnam, ORCID: 0000-0002-0153-1845, [email protected]; 2 Vietnam National University – University of Economics and Business, School of Business Administration, Vietnam, ORCID: 0000-0001-6739-6378, [email protected] (corresponding author); 3 Yokohama National University, Department of Business Administration, Japan, ORCID: 0000-0002-2669-1538, [email protected]; 4 The Open University of Japan, Faculty of Liberal Arts, Japan, ORCID: 0000-0002-5475-5199, y[email protected]. Abstract: Along with information technology adoption, supply chain coordination through information sharing activities has become essential to achieve supply chain effectiveness and resilience. This paper presents the results of an empirical study investigating the moderating roles of information technology link and information sharing on the relationship between supplier development, knowledge absorption from customers, and supply chain performance. Statistical techniques such as measurement test, correlation analysis, and regression analysis are applied to analyze the data collected during the Round 4 of the High Performance Manufacturing (HPM) Project. The data sample includes 304 manufacturing plants operating in 13 countries including Brazil, China, Finland, German, Italy, Israel, Japan, Korea, Spain, Sweden, Taiwan, United Kingdom, and Vietnam. Analytical results indicate that a supply chain would perform better when focal firms invest their effort in supplier development and knowledge absorption activities and develop a strong link with suppliers and customers through information technology systems. Information technology links with suppliers and customers have significant moderating roles in strengthening the relationship between supplier development, knowledge absorption from customers, and supply chain performance. Moreover, information sharing exchange with suppliers were found to make the association between supplier development and supply chain performance becomes more pronounced. The empirical results contribute to the existing literature of information sharing and supply chain coordination in supply chain management. In addition, this study provides several practical implications, such that information technology linkage and information sharing activities should be considered as the platforms for organizations to interact with different supply chain partners for achieving high supply chain performance. Keywords: Information technology link, information sharing, supplier development, knowledge absorption, supply chain performance. JEL Classification: M10, M11, M15. EM_4_2022.indd 118 9.1.2023 10:32:56 119 4, XXV, 2022 Business Administration and Management APA Style Citation: Phan, A. C., Nguyen, H. T., Nguyen, H. A., & Matsui, Y. (2022). Moderating Roles of Information Technology Link and Information Sharing in Driving Supply Chain Performance through Supplier Development and Knowledge Absorption: Empirical Evidence from Manufacturing Firms across Countries. E&M Economics and Management, 25(4), 118–136. https://doi.org/10.15240/tul/001/2022-4-008 Introduction The COVID-19 pandemic has caused turbulence that significantly shocks supply chain management. Regardless of the industry, we have seen the supply chain disruption due to factories shutdown, social distancing, restrictions in transportation, raw materials shipping, and border closure (Sarkis, 2020; van Hoek, 2020). Consequently, a research trend emerged to improve supply chain sustainability, resilience, and performance (e.g., Ivanov & Das, 2020; Shen & Sun, 2021), which raised the importance of close communication and collaboration among supply chain partners. For example, manufacturing firms can improve supply chain learning through supplier development activities and customer knowledge absorption (Huo et al., 2020). Supplier development refers to upstream supply chain coordination, which is the effort of focal firms to improve suppliers’ performance and capabilities to ensure longand short-term supply needs (Krause et al., 2007). Moreover, knowledge absorption from customers is a necessary downstream activity, which describes a process that firms communicate with retailers to achieve information to help realize demand and customer preferences (Braojos et al., 2020). Both supplier development and knowledge absorption are critical determinants of supply chain performance (e.g., Luo et al., 2010; Roberts & Grover, 2014). However, we have seen a significant challenge towards supply chain coordination under environments of high workplace turbulence, uncertainty, and fragility. Without a sufficient communication between firms and their partners, the benefits of supply chain coordination might not be ensured. For example, literature related to the dark side of business-to-business relationships shows that supplier development initiatives can cause opportunistic behaviour, or it can harm operational effectiveness due to unrealistic goals and mismatch between challenges and suppliers’ current capacity (Sucky & Durst, 2013; Tran et al., 2021). In addition, relying on knowledge from a specific group of customers and lacking of close information sharing back and forth can cause risks of market myopia and loss of know-how (Gassmann et al., 2010). Therefore, there is a need to establish an effective information technology (IT) link system and a high level of information sharing for greater information availability in the supply chain (Sarkis, 2020; van Hoek, 2020). IT link is the integration in using of electronic tools to communicate with key suppliers and customers, thus facilitating information sharing intensity and speed, leading to better buyer-supplier relationship and operational performance (Baihaqi & Sohal, 2013). This study has two main objectives. First, the authors would like to verify the impact of supplier development and knowledge absorption from customers activities on supply chain performance. Rather than testing the effect of those practices separately (Carr & Kaynak, 2007; Krause et al., 2007; Storey & Larbig, 2017), we integrate them into a single model to provide a holistic view of how focal firms improve supply chain performance by interacting with both upstream and downstream partners. Second, we propose that IT link and level of information sharing should be significant foundations to strengthening the relationship between supply chain coordination and supply chain performance. Although previous studies have indicated the critical role of IT capacity on supply chain performance (e.g., Prajogo & Olhager, 2012), the underlying mechanism is more complicated since it might depend on how compatible information systems are among chain members and how a firm develops capabilities to process shared information effectively. Thus, attempts to fill the research gaps by answering the research question: could IT link and information sharing with/by suppliers and customers facilitate the effect of supplier development and knowledge absorption on supply chain performance? The remainder of this study is as follows. The following section provides a literature review on supply chain performance, supplier development, knowledge absorption, IT link, EM_4_2022.indd 119 9.1.2023 10:32:56 120 2022, XXV, 4 Business Administration and Management and information sharing. Subsequently, the hypothesis development and conceptual model are presented, followed by the methodology section includes data collection, measures, and analysis procedure. Then, we provide the analysis result to validate hypotheses. Based on the findings, discussion and implications are drawn. Finally, we discuss several limitations and future research directions. 1. Literature Review 1.1 Supply Chain Performance Supply chain performance refers to the effectiveness and efficiency of a supply chain, which is strongly influenced by supplier performance in quality, delivery, responsiveness, cost, and technical support (Wu et al., 2014). Suppliers have become essential partners of manufacturers in technical innovation, product development, quality improvement, rather than merely material deliverers (Krause et al., 2007). A low-performance or dissatisfied supplier would influence the performance of all supply chain members by creating a bullwhip effect. Specifically, suppliers who provide low-quality materials cause a higher defect rate in buyers’ production, leading to lower sales and customer satisfaction. Moreover, unsatisfied partners tend to exit the existing relationship, hence incurring a higher cost for focal firms to find other suitable suppliers. Thus, well-performing supplier is a key to maintaining supply chain sustainability and satisfaction. Determinants of supply chain performance have been studied intensively in the literature. There is a consensus that supply chain integration should be a key to enabling a centralized management approach across the value network, thus improving information sharing and supply chain performance (Koçoğlu et al., 2011; Shee et al., 2018). Chau et al. (2021) indicated that supply chain collaboration, process integration, customer focus together with an effective information technology system are critical success factors of supply chain quality. Under an uncertain and dynamic business environment that requires collaboration and innovation, supplier development is a core practice helping focal firms communicate and continually enhance their suppliers’ capabilities (Saghiri & Wilding, 2021). Moreover, knowledge from customers (e.g., demand, market information, etc.) is also essential for firms in strategic decision-making, thereby coordinating with upstream partners to adjust strategic goals, thus leading to better supply chain performance (Huo et al., 2020; Storey & Larbig, 2017). 1.2 Supplier Development: Concepts and Outcomes The concept of supplier development has been discussed in supply chain management literature to indicate manufacturers’ effort to establish a viable network of suppliers and enhance suppliers’ performance. It emerged in response to a need to develop a cooperative buyersupplier relationship to benefit supply chain activities and create organizational competitive advantage (Lee et al., 2018). Specifically, the reciprocal interdependence among components providers and final assemblers in industries that produce complex products became crucial. Some examples of the industry, to name but a few, include automobiles, electronics, and machinery industry (Krause et al., 2007), which are the target industries in this study. The practice of supplier development has been started in Japanese companies such as Toyota and Honda, then spread out to other countries as a strategic weapon of buying firms (Glavee-Geo, 2019). In more detail, when the firms invest in developing supplier capabilities, involved in knowledge exchange, implementing governance mechanisms, both buyer and supplier can gain supernormal profit (Krause et al., 2007). Literature suggests that supplier development is a way to achieve long-term suppliers’ relationships; therefore, a supply chain can be beneficial of lower cost, better quality and flexibility, and reliable delivery (Krause et al., 2007; Lee et al., 2018). Moreover, efficient supplier development initiatives can lead to higher supplier satisfaction and supplier performance and facilitate new product development processes (GlaveeGeo, 2019; Modi & Mabert, 2007). However, several studies even found negative impact of supplier development such as opportunism (Tran et al., 2021) and operational deficiency (Sucky & Durst, 2013) due to lacking of appropriate mechanism and platform for close communication (Krause et al., 2007). 1.3 Knowledge Absorption from Customers: Concepts and Outcomes Knowledge absorption from customers is how a manufacturing firm learns from its customers EM_4_2022.indd 120 9.1.2023 10:32:57 121 4, XXV, 2022 Business Administration and Management during the new product development process, in terms of product knowledge, technology, demands, purchasing history, and others (Salojärvi et al., 2010). To fulfil customers’ needs and be more responsive to the market, exploiting customers’ knowledge to facilitate internal learning has become a potential source of competitive advantage. A focal firm can absorb customers’ knowledge by involving customers in its operations (e.g., designing process) rather than just gathering feedback by traditional market research (Storey & Larbig, 2017). Nguyen and Harrison (2018) used the term “customer leverage” to describe a firm’s capability to obtain and utilize knowledge from customers in developing new products and services. Other terms are used to describe the customer knowledge management process, such as customer relationship management, customer intimacy, and customer references. Surprisingly, to some extent, there is an inconsistency among previous studies regarding the outcomes of customer involvement, collaboration, and integration. Many works have confirmed the positive effect of the acquisition of customers’ knowledge (e.g., Huo et al., 2020; Nguyen & Harrison, 2018; Phan et al., 2020). However, several studies even pointed out the opposing sides of customer integration in the process of developing and commercializing new products (e.g., Gassmann et al., 2010). Specifically, relying on knowledge and information from a particular group of customers can make firms too dependent on specific customers’ interests, leading to serving a niche market only. Gassmann et al. (2010) noted that customer integration causes a risk of loss of know-how, as some knowledgeable customers might use the organization’s intellectual properties for their personal purposes. Therefore, the inconsistent findings emphasize the importance of moderating factors in the relationship between customers’ knowledge absorption and performance, such as developing an integrated IT infrastructure and frequently sharing information (Braojos et al., 2020). 1.4 IT Link and Information Sharing as Platforms for Supply Chain Coordination The highly competitive and uncertain business environment leads to the necessity of collaboration with external partners to ensure supply chain performance. However, communication across the supply chain, also managing knowledge absorbed from supply chain partners, requires organizational capabilities of linking IT systems and sharing information with its partners (Braojos et al., 2020; van Hoek, 2020). IT is defined as the application of similar automated systems or computer-to-computer links within or between firms and supply chain partners (Prajogo & Olhager, 2012). It has become a crucial part of supply chain management (SCM) to participate in knowledge and capabilities sharing. Internally, IT integration provides several benefits such as agility, transaction management efficiency, and fast decision-making, leading to higher efficiency in R&D and new product development. Externally, IT creates a unique value chain, helping focal firms to collaborate with suppliers for on-time delivery or communicate information from customers to become more responsive. If the IT is linked across the supply chain regarding similarity, connectivity, and compatibility, it will enhance supply chain efficiency because of collaboration through information sharing, coordination, monitoring, and joint decision making (Ye & Wang, 2013). While IT link is a platform for communication, the type of information shared across the supply chain also plays an essential role. Supply chain information sharing refers to the actions that make information available to other chain members (Li et al., 2019). This is an inevitable practice to mitigate supply chain uncertainty, including delivery delays, machine breakdowns, and order fluctuations (Jeong & Hong, 2017). Information sharing between manufacturer, supplier, and customer can be tactical (e.g., purchasing and logistics) or strategic (e.g., long-term relationship objectives and customer information). Information sharing has been proved to be significant in driving several types of performance. It enables focal firms to access various information such as sales, production, and logistics, hence improving visibility, as well as reducing cost and improving financial performance (Şahin & Topal, 2018). Moreover, information sharing allows firms to collaborate closely with their suppliers and customers, thereby developing trust and a better long-term relationship. This long-term relationship leads to a shorter lead time and order fulfilment cycle, a faster and high-quality new product development process (Braojos et al., 2020). EM_4_2022.indd 121 9.1.2023 10:32:57 122 2022, XXV, 4 Business Administration and Management Author IT link conceptualization Information sharing conceptualization Data collection and sample Data analysis Main findings Phung et al. (2021) IT link with suppliers Information sharing with suppliers 304 manufacturing firms from 13 countries Serial-multiple mediation analysis IT link with suppliers and information sharing with suppliers mediate the relationship between supply chain process integration and upward supply chain performance Sundram et al. (2020) IT applications (e.g., online transaction, website system, CRM, etc.) adoption Information sharing with and by trading partners 112 manufacturing firms in Malaysia Structural equation modeling IT improves information sharing, leading to a higher level of supply chain integration and supply chain performance Maskey et al. (2019) Electronic linkages between trading partners Operational information sharing and strategic information sharing 131 supply chain participants in Nepal Exploratory factor analysis and path analysis Several factors are confirmed as determinants of supply chain information sharing, for example, supply network configuration, organizational capability, commitment Pham et al. (2019) In-house and logistics systems, a system for customers to book online, track shipment, and make payment Information sharing, including operational, capability-related, strategic plan, and competitive information 14 participants from 11 smallto-medium local service providers and Vietnam Logistics Association Data analysis of in-depth interviews Most firms share operational information through traditional communication channels and lack an integrated system Vanpoucke et al. (2017) Using of electronic tools to connect with suppliers and customers Information exchange in terms of inventory, production planning, demand forecast with key suppliers and customers 563 companies in 20 countries Constrained non-linear regression analysis IT use moderates the impact of information exchange on operational integration; the use of IT is stronger for upstream integration Baihaqi and Sohal (2013) Integrated IT system including database, production planning, and internet Information sharing with/by suppliers and customers 150 Australian manufacturing companies Regression analysis by using structural equation modeling (SEM) Integrated IT positively impacts information sharing intensity, leading to better buyersupplier relationships and operational performance Ye and Wang (2013) How IT infrastructure is aligned with supply chain partners regarding similarity, connectivity, and compatibility Information sharing with suppliers, including order processing, inventory, production capacity planning, and order forecasting 141 Chinese manufacturers t-test, psychometric test, regression analysis using SEM Information sharing mediates the relationship between IT alignment and operational performance Prajogo and Olhager (2012) Electronic links with suppliers, which include IT-enabled transaction processing, tracking shipments, electronic transfer of orders, funds, and invoices Information sharing with suppliers and information sharing by suppliers 232 Australian firms Regression analysis using SEM Information technology and information sharing significantly improve logistic integration, improving operational performance Koçoğlu et al. (2011) A common IT infrastructure to facilitate transactions, communication within organizations and among supply chain partners Information sharing with customers and suppliers, and information sharing between functions of the organization 158 manufacturing firms in Turkey Exploratory factor analysis, regression analysis using Partial Least-Squares (PLS) – based SEM Supply chain integration facilitates information sharing by providing connectedness and collaboration among members; better information sharing improves supply chain performance Source: own Tab. 1: Recent literature of IT link and information sharing in supply chain EM_4_2022.indd 122 9.1.2023 10:32:58 123 4, XXV, 2022 Business Administration and Management The empirical evidence related to the effect of information technology and information sharing in supply chain management is summarized in Tab. 1. The above literature review shows that it is essential to consider IT link and information sharing as technological bases to ensure supply chain cooperation and integration. However, direct effect of IT and information sharing might fail to explain why there is a difference in performance improvement among firms when there is a similar adoption of IT and information sharing. We propose that supply chain coordination, which includes supplier development and knowledge absorption from customers, would play direct influence roles, while IT and information sharing are necessary moderators to strengthen those influences. 2. Hypotheses Development and Conceptual Model 2.1 Role of Supplier Development and Knowledge Absorption in Supply Chain Performance Since supplier development activities enhance the coordination between buyers and suppliers, a positive impact on both sides can be expected. Specifically, collaborative activities, including giving feedback, training from buyers, can assist suppliers in improving their performance (Krause et al., 2007). When supplier performance is improved, focal firms will be beneficial from high-quality materials, on-time delivery, and better inventory management. Previous studies showed that supplier development helps the firm reduce the supply base, then improves financial performance such as cost and revenue, and non-financial performance such as product quality, collaborative product development, and customer service (Luo et al., 2010). Therefore, supplier capabilities improvement regarding technical, quality, delivery, and cost performance is one of the requirements to build a competitive advantage in the supply chain, i.e., to meet the unstable market demand (Carr & Kaynak, 2007). More importantly, close interaction with suppliers ensures good supplier relationships and develops supply chain agility in case upstream activities have to be adapted to any change from downstream (Tripathy et al., 2016). Therefore, we propose the first hypothesis as follow: H1: Supplier development is positively related to supply chain performance. Customer relationship was argued as a key for strategic decision-making, providing new opportunities for value creation and improving supply chain competitive advantage (Salojärvi et al., 2010; Tripathy et al., 2016). As such, firms should collect timely and reliable customer information (Chau et al., 2021). Grover and Kohli (2012) indicated that knowledge absorption from retailers (e.g., analytical planning, forecasting, replenishment) would help firms realize cyclical fluctuation in customers’ demand and preferences so that they can adjust and provide better customer services. Knowledge absorption from customers also helps upstream firms to develop customer agility for better sensing market opportunities (Roberts & Grover, 2014). Thus, building an IT interaction platform for customers such as web-based customer infrastructure together with the firm’s analytical ability will facilitate knowledge-creating, there fore enhancing the firm’s competitive advantage. Lead users who are product-savvy may even involve in the idea generation stage of the new product development process to provide customer knowledge, contributing to the flexibility and success of new product launches (Storey & Larbig, 2017). In general, customer knowledge improves sensing and improvising capabilities, reduces uncertainty, and enhances supply chain performance. Therefore, the second hypothesis is stated as: H2: Knowledge absorption from customers is positively related to supply chain performance. 2.2 Moderating Role of IT Link and Information Sharing Supply chain coordination requires an integrated IT system to obtain better real-time information intensity and quality (Baihaqi & Sohal, 2013; Prajogo & Olhager, 2012). Specifically, IT alignment allows coordinating activities with supply chain partners, such as forecasting and scheduling operations, regardless of time and spatial distance. For suppliers, firms can seamlessly share order information, operational information, strategies, and competition information. In turn, they can ask suppliers for cost information, delivery information, or any change in engineering information (Prajogo & Olhager, 2012). If there is supplier integration, firms are more willing to implement supplier EM_4_2022.indd 123 9.1.2023 10:32:58 124 2022, XXV, 4 Business Administration and Management development activities (Jin et al., 2019). For customers, the IT link helps firms continuously understand customer demand (Fawcett et al., 2007). Moreover, customers with technical knowledge can monitor the production of their orders (Ye & Wang, 2013). In general, IT link with suppliers and customers leads to better connectivity, facilitating coordinating activities among supply members so that managers across organizational boundaries can decide in a faster and more collaborative way. It leads us to the following two hypotheses: H3a: IT link with suppliers strengthens the relationship between supplier development and supply chain performance. H4a: IT link with customers strengthens the relationship between knowledge absorption from customers and supply chain performance. Willingness and ability to develop suppliers depend significantly on the trust and commitment of focal firms in the relationship with specific suppliers. Therefore, manufacturers are more likely to select and develop suppliers with a higher willingness to share information because it increases understanding of suppliers’ situations (Carr & Kaynak, 2007). As long-term orientation is developed, it facilitates direct interaction (e.g., on-site visit, joint problem solving) that creates value for both buyers and suppliers whenever problems occur. Information sharing can be considered a platform for knowledge transfer, which disseminates implicit knowledge to help both parties tackle problems in the production process (Lee et al., 2018; Modi & Mabert, 2007). Chen et al. (2018) argued that supplier development and knowledge management activities are interdependent and need to be implemented simultaneously to achieve desired outcomes. Thus, higher information sharing with and by suppliers supports the supplier development activities, improving supplier capabilities and performance in terms of highquality materials, lower-cost offering, on-time delivery. We propose the following hypotheses: H3b: Information sharing by suppliers strengthens the relationship between supplier development and supply chain performance. H3c: Information sharing with suppliers strengthens the relationship between supplier development and supply chain performance. The knowledge-based view suggests that knowledge is a critical asset of an organization to create value, raising the importance of how focal firms acquire external knowledge and generate new values for customers (Nguyen & Harrison, 2018). Information sharing by customers provides insights of customer behaviour; therefore, they Fig. 1: Analytical framework Source: own EM_4_2022.indd 124 9.1.2023 10:33:00 125 4, XXV, 2022 Business Administration and Management can improve the product development process and enhance customer satisfaction. Acquiring information sharing from the customer is an initial stage to creating a learning organization, in which the acquired information is assimilated for commercial exploitations (Huo et al., 2020). Moreover, frequent sharing with customers and receiving information from them encourage discussion among agents and experts, making it easier for firms to compare then integrate new knowledge into an existing knowledge base, as well as ensuring information transparency (Braojos et al., 2020). As a result, flexibility performance is improved as the decision-making process can be adjusted quickly across the supply chain. Final hypotheses are argued as follow: H4b: Information sharing by customers strengthens the relationship between knowledge absorption and supply chain performance. H4c: Information sharing with customers strengthens the relationship between knowledge absorption and supply chain performance. All hypotheses are illustrated in the ana lytical framework presented in Fig. 1. 3. Methodology 3.1 Data Collection Data in this study are utilized from a questionnaire survey of High Performance Manufacturing (HPM) project. This project was initiated as joint research in the 1980s by group of academicians in the United States, focusing on manufacturing firms in 3 industries: electrical & electronics, machinery, and automobile. HPM project aims to determine best practices in the manufacturing industry to achieve high performance in a global competition (Schroeder & Flynn, 2001). During 1990s–2010s, there was a great involvement of international experts and researchers to develop a theoretical background and questionnaire survey. The HPM Project collected information in various aspects such as manufacturing strategy, supply chain management, quality management, human resource management, knowledge management, and so on. Based on business and trade journals and financial information, the researchers identified and selected manufacturers to be surveyed in each country. While the first survey conducted in 1980s focused on 46 manufacturing plants in the US, the second survey was extended to 146 manufacturing plants in German, Italy, Japan, the UK, and the US in 1990s. The third survey in 2000s involved other countries such as Austria, Finland, Korea, Spain, and Sweden to join the project with total 266 plants. Based on this HPM database, a large number of international publications was made to highlight the impacts of manufacturing performance on performance of manufacturing plants from different aspects (Flynn et al., 2016; Phan et al., 2020). This study analyses data in Round 4 of the HPM project, which were collected during 2013–2015. The sample includes 304 plants in 13 countries: Brazil (24), China (30), Finland (17), German (28), Italy (29), Israel (26), Japan (22), Korea (26), Spain (25), Sweden (9), Taiwan (30), United Kingdom (13), and Vietnam (25). The HPM survey asked participants from 12 positions in each plant, including plant superintendents, managers, supervisors, engineers, etc. Data use in this study collected from 2 positions: question items related with customers were evaluated by downstream supply chain managers and question items related with suppliers were evaluated by upstream supply chain managers. By collecting data from multiple sources, we could reduce the perceptual bias, ensure the independence among variables the reliability of causal relationships by linear regression analysis at both downstream and upstream level. Moreover, this study uses scales related to supply chain coordination, information technology link and information sharing, in which we primarily test the moderating roles of both downstream and upstream IT link and information sharing on the relationship between supplier development and knowledge absorption from customers on supply chain performance. 3.2 Measurement The measurement scales were developed based on theoretical review and adapted from previous research in supply chain management (e.g., Li et al., 2019; Paulraj & Chen, 2007; Vanpoucke et al., 2017), which ensure the content validity of the measurement. Reviewing and adapting measurement scales from previous literature helps to consolidate the linearity of relationships between variables used in the conceptual model, which strengthens the reliability of using linear regression analysis. A five-point Likert scale was used to measure the respondent’s judgment by scoring each item from 1 to 5. The respondents are manufacturing plant representatives working in the fields EM_4_2022.indd 125 9.1.2023 10:33:01 126 2022, XXV, 4 Business Administration and Management of Upstream Supply Chain Management (to answer questions related to suppliers), Downstream Supply Chain Management (to answer questions related to customers). The measurement items are provided in the Appendix (Tab. A1). 3.3 Data Analysis Procedure Data are analysed by using the SPSS 22.0 software. First, measurement test is executed to check the scale reliability and validity. Also, the data were checked to make certain that it meets all conditions to perform linear regression analysis. Second, we implement correlation analysis to observe the bivariate association between variables. Subsequently, direct relation ships are tested by performing linear regression, and moderating effect is tested by using the PROCESS macro developed by Hayes (2017). Finally, we use t-test to assess the difference between countries regarding adopting IT link, information sharing, supplier development, and knowledge absorption. 4. Result 4.1 Measurement Test Initially, each variable in the data sample was checked to ensure that linear regression analysis can be conducted. For example, using techniques such as Durbin-Watson test, normality test and scatter plot, the outlier condition, errors independence, homoscedasticity among variables, as well as normal distributed condition are checked to be satisfactory for further analysis. Then, measurement test was implemented to ensure reliability and validity of collected data as follows:  Reliability test: Cronbach’s alpha indices of all scales have to be greater than 0.6 to satisfy the internal consistency between items within constructs.  Content validity: Extensive literature review has been done to ensure that all concepts have a solid scientific foundation.  Construct validity: Factor analysis is performed to test the validity within a construct. In other words, it is to ensure within-construct items are one-dimensional. Several criteria should be satisfied, including percentage of variance is greater than 0.5, Eigenvalues are larger 1, and factor loadings are greater than 0.5. The factor loadings of all items are provided in the Appendix (Tab. A1). The result of the measurement test is provided in Tab. 2 indicating that all tests are satisfied, and the data are reliable and validated. Factor Min Max Mean Standard deviation Cronbach’s alpha Eigenvalues Percentage of variance Supplier development 2.33 5.00 3.89 0.61 0.801 3.031 50.522 Knowledge absorption from customers 1.00 5.00 3.63 0.74 0.869 3.295 65.902 IT link with suppliers 1.00 5.00 3.37 1.01 0.839 2.716 67.902 Information sharing by suppliers 1.00 5.00 3.40 0.88 0.886 3.888 64.802 Information sharing with suppliers 1.00 5.00 3.21 0.99 0.920 5.138 64.229 IT link with customers 1.00 5.00 3.03 1.04 0.858 2.820 70.509 Information sharing by customers 1.00 5.00 2.94 0.94 0.858 3.189 63.784 Information sharing with customers 1.00 5.00 3.15 0.95 0.911 4.955 61.939 Supply chain performance 1.88 5.00 3.86 0.54 0.873 4.299 53.738 Source: own Tab. 2: Measurement test results EM_4_2022.indd 126 9.1.2023 10:33:01 133 4, XXV, 2022 Business Administration and Management Chain Integration, towards Supply Chain Performance and Firm Performance. Journal of International Logistics and Trade, 18(1), 15–31. https://doi.org/10.24006/jilt.2020.18.1.015 Tran, P. N. T., Gorton, M., & Lemke, F. (2021). When supplier development initiatives fail: Identifying the causes of opportunism and unexpected outcomes. Journal of Business Research, 127, 277–289. https://doi. org/10.1016/j.jbusres.2021.01.009 Tripathy, S., Aich, S., Chakraborty, A., & Lee, G. M. (2016). Information technology is an enabling factor affecting supply chain performance in Indian SMEs. Journal of Modelling in Management, 11(1), 269–287. https://doi.org/10.1108/jm2-01-2014-0004 Van Hoek, R. (2020). Research opportunities for a more resilient post-COVID-19 supply chain – Closing the gap between research findings and industry practice. International Journal of Operations & Production Management, 40(4), 341–355. https://doi.org/10.1108/ijopm03-2020-0165 Vanpoucke, E., Vereecke, A., & Muylle, S. (2017). Leveraging the impact of supply chain integration through information technology. International Journal of Operations & Production Management, 37(4), 510–530. https://doi.org/10.1108/ijopm-07-2015-0441 Wu, I.-L., Chuang, C.-H., & Hsu, C.-H. (2014). Information sharing and collaborative behaviors in enabling supply chain performance: A social exchange perspective. International Journal of Production Economics, 148, 122–132. https://doi.org/10.1016/j.ijpe.2013.09.016 Ye, F., & Wang, Z. (2013). Effects of information technology alignment and information sharing on supply chain operational performance. Computers & Industrial Engineering, 65(3), 370–377. https://doi.org/ 10.1016/j.cie.2013.03.012 EM_4_2022.indd 133 9.1.2023 10:33:04 134 2022, XXV, 4 Business Administration and Management APPENDIX Tab. A1 presents scale measurement and factor analysis result in validity test. The factor loading of each item is also provided. Scale Sources Items Factor loading Supplier development Carr and Kaynak (2007); Krause et al. (2007) 1. We provide our suppliers with sufficient technical assistance 0.66 2. We hold regular meetings to exchange improvement ideas with our suppliers 0.62 3. We encourage our suppliers to continuously improve their production processes 0.72 4. If necessary, we ask our suppliers to invest in significant process improvement 0.64 5. We offer the necessary training to our suppliers 0.75 6. We share our vision and supply chain policy with our key suppliers 0.72 7. As our suppliers strive to improve their processes, we provide assistance 0.72 Information technology links with suppliers Vanpoucke et al. (2017); Paulraj and Chen (2007) 1. Our information system is electronically connected with those of our key suppliers 0.84 2. We use information technology enabled transaction processing with our key suppliers 0.90 3. We use electronic transfer of purchase orders, invoices and/or funds to our key suppliers 0.80 4. We use information technology (for example, RFID or PIDT) to track and/or expedite shipments to our key suppliers 0.75 Information sharing by suppliers Vanpoucke et al. (2017); Baihaqi and Sohal (2013) Our plant has access to the following information about our key suppliers: 1. Cost information This item was excluded 2. Delivery information 0.80 3. Demand change information 0.91 4. Demand forecast information 0.90 5. Inventory information This item was excluded 6. Production capacity information 0.79 7. Productivity information This item was excluded 8. Quality information This item was excluded 9. Schedule information 0.80 10. Sensitive information (e.g., financial information, proprietary process information, etc.) 0.61 Tab. A1: Scale measurement and factor loading – Part 1 EM_4_2022.indd 134 9.1.2023 10:33:04 135 4, XXV, 2022 Business Administration and Management Scale Sources Items Factor loading Information sharing with suppliers Prajogo and Olhager (2012); Ye and Wang (2013); Baihaqi and Sohal (2013) Our key suppliers have access to the following information about our plant: 1. Cost information This item was excluded 2. Delivery information 0.80 3. Demand change information 0.73 4. Demand forecast information This item was excluded 5. Information about plant manufacturing capabilities 0.81 6. Inventory information 0.82 7. Production capacity information 0.87 8. Productivity information 0.80 9. Quality information 0.82 10. Schedule information 0.75 11. Sensitive information (e.g., financial information, proprietary process information, etc.) This item was excluded Knowledge absorption from customers Storey and Larbig (2017); Salojärvi et al. (2010) 1. We obtain a great amount of our product knowledge from our customers 0.81 2. Our customers provide us with valuable information on product innovation 0.81 3. We have learned a lot from our customers as part of our product development process 0.86 4. We quickly adopt new technologies by applying what we learn from our customers 0.80 5. We systematically check whether we have applied the knowledge we acquire from our customers regarding our products 0.76 Information technology links with customers Vanpoucke et al. (2017); Paulraj and Chen (2007) 1. Our information system is electronically connected with those of our customers 0.86 2. Our customers use information technology enabled transaction processing with our plant 0.90 3. Our customers use electronic transfer of purchase orders, invoices and/ or funds to us 0.83 4. Our customers use information technology (e.g., RFID or PIDT) to track and/or expedite shipments to our plant 0.76 Information sharing by customers Li et al. (2019); Vanpoucke et al. (2017); Paulraj and Chen (2007) Our plant has access to the following information about our key customers: 1. Demand change information 0.71 2. Demand forecast information This item was excluded 3. Inventory information 0.85 4. Production schedule information 0.79 5. Productivity information 0.86 6. Sensitive information (e.g., financial information, proprietary process information, etc.) 0.77 Tab. A1: Scale measurement and factor loading – Part 2 EM_4_2022.indd 135 9.1.2023 10:33:05 136 2022, XXV, 4 Business Administration and Management Scale Sources Items Factor loading Information sharing with customers Koçoğlu et al. (2011); Baihaqi and Sohal (2013) Our key customers have access to the following information about our plant: 1. Cost information 0.75 2. Delivery information This item was excluded 3. Demand change information 0.84 4. Demand forecast information 0.82 5. Information about plant manufacturing capabilities 0.78 6. Inventory information 0.75 7. Production capacity information 0.84 8. Productivity information 0.78 9. Quality information This item was excluded 10. Schedule information 0.72 11. Sensitive information (e.g., financial information, proprietary process information, etc.) This item was excluded Supply chain performance Wu et al. (2014); Krause et al. (2007) We are satisfied with the performance of our key suppliers on the following criteria: 1. Conformance with specifications 0.69 2. Design capability 0.67 3. On-time delivery 0.78 4. Price 0.69 5. Product liability 0.79 6. Quick response on short notice 0.69 7. Service level 0.79 8. Technical skill 0.77 Source: own Tab. A1: Scale measurement and factor loading – Part 3 EM_4_2022.indd 136 9.1.2023 10:33:05