LAUSR

Abstract Despite the emerging role of information technology (IT)-enabled interactions between exchange partners, few studies simultaneously examine IT-enabled governance (virtual governance) and relational governance. Drawing on the relational and IT-enabled governance literatures, this study develops and tests a contingent view of the interplay between virtual and relational governance in emerging-market-supplier/MNE-buyer relationships. The findings from a survey of 240 Taiwanese contracting suppliers show that the interaction between virtual and relational governance is negatively related to relationship performance. In addition, the negative interaction is stronger when the institutional distance is higher and the environment is changing rapidly. The results indicate the need for emerging-market suppliers to be aware of different uses of virtual and relational governance strategies according to differences in institutional environments and how the environment is changing.