Style and substance: a case study of the expansion of mature business-to-business relationships in the Italian clothing industry

Purpose – This paper aims to propose a model of the determinants of the expansion of mature business-to-business relationships in the downstream channel of the Italian clothing industry. The authors investigate the role of both economic and social determinants of retail buyers’ intentions to expand their relationships with a seller. Design/methodology/approach – The empirical analysis is based on surveys of more than 150 retail buyers in mature relationships with a major clothing company. This context offers a unique opportunity to explore the interplay between the need for stable relationships and the need to continuously innovate to satisfy consumer demand, given rapidly changing tastes and styles, which can inhibit relationship expansion. Findings – Buyers’ intentions to expand relationships are primarily determined by the absence of a formal agreement with the seller. Perceptions of a seller’s goodwill seem to overshadow the detrimental effects of two likely sources of opportunism in the clothing industry: demand uncertainty and the availability of alternative suppliers. Findings also provide evidence of a substitutive effect of formal control and trust in mature business relationships. Originality/value – The authors provide insights into the dynamics of mature business relationships with a focus on expansion, rather than just the propensity for relational continuity, and they show how the interplay of transaction costs and social dimensions leads to this expansion. The authors also provide empirical evidence of a context, the clothing industry, where downstream relationships represent an important source of competitive advantage.