The effect of relational capital on performance: Knowledge sharing as mediation variables in supplier and buyer relation

Interactions that occur in cooperation within supplier and buyer relationships create good relationships manifested by mutual trust and respect, and good friendships between suppliers and buyers. Relationships based on good intentions and manifested through a number of attributes are known as relational capital. Relationships built on trust, to the cause of friendship between suppliers and buyers mutual respect and reciprocity are what makes the buyer willing to share knowledge with the supplier. Given this shared knowledge, suppliers can help improve buyer performance. Thus, this study aims to examine the effect of relational capital on performance through knowledge sharing into mediation variables. This research uses a quantitative approach to test several hypotheses through partial least square (PLS) analysis, and examines a sample of 48 buyers within the cement industry. The results of this study indicate that relational capital positively and significantly influences knowledge sharing, which then positively and significantly affects the buyer's performance. However, relational capital has no significant effect on buyer performance. Knowledge sharing mediates in full relational capital relationships to buyer performance.