The relationship between modes of governance and relational tie in new product development relationships

Purpose – This paper aims to examine the impact of trust, norm of information sharing, and vertical control on relational ties in new product development (NPD) relationships. Design/methodology/approach – Survey research was conducted to collect data from 112 NPD relationships and structural equation modeling was conducted to test the hypotheses. Findings – The results suggest that trust and norms of information sharing are positively related to relational ties, while vertical control and relational ties are negatively related. Three independent variables (i.e. trust, norm of information sharing, and vertical control) could significantly predict relational ties. It was also found that there are threshold effects for independent variables as they influence relational ties. Originality/value – The study enhances the understanding of NPD relationships by examining the key modes of governance through which relational ties are influenced.