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Trust, control, and risk - A test of das and teng's conceptual framework for pharmaceutical buyer-supplier relationships

This study investigates the interaction among trust, control, and risk by empirically testing Das and Teng's conceptual framework in a long-term supply agreement following a qualitative study of context. Results suggest that only three model propositions were not supported. Goodwill trust was not related to relational risks, whereas output control and social control were positively related to relational risks and performance risks, respectively. The relationship between trust and social control is complementary, whereas that for trust and output control is substitutive. Goodwill trust is positively related to performance risk taking. Also, output control undermines goodwill and competence trust, whereas social control enhances both types of trust. Goodwill trust and competence trust are positively related to social control. Although goodwill trust decreases the need for output control, competence trust does not. The results suggest that Das and Teng's original model is substantially applicable to the given context.