Abstract for: A System Dynamics Approach to Analyze the Effects of Trust on the Financial Performance of a Supply Chain Dyad

Integration among Supply Chain actors has been identified as a source of competitive advantage, triggering firms to adopt strategies to emphasize relationships with other companies across the Supply Chain and leading researchers to study the relevant inter-organizational factors, usually treated in isolation by independent studies, that influence firm performance. The Supply Chain Management Framework (Lamber & Enz 2016) recognizes trust and commitment as behavioral management factors determining a successful integration within a firm and across firms in a Supply Chain. An integrative theory-driven approach, using cross-sectional research, empirically confirms previous studies about trading partner trust being a direct antecedent for Supply Chain Integration and business performance (Mora-Monge et al., 2019). However, these studies use subjective measures to estimate business performance and capture a particular moment of the evolving trading partner relationship, opening opportunities to analyze and measure the dynamic impact of trust on the financial performance among Supply Chain actors over time. In this research, we propose a system dynamics model to evaluate, through a longitudinal analysis using objective measures, the impact of trust on the financial performance of partners in a Supply Chain dyad relationship. To this aim, we integrate trust models with previous works of Supply Chain models from Sterman (2000) and financial dynamics models from Yamaguchi (2016) into a Supply Chain causal loop diagram.