Impact of Supplier Development on Supplier Performance: Mediating Role of Trust

Value-adding functions of textile industry make the buying firms dependent on their suppliers. The buying firms utilize supplier development practices to improve supplier performance. This study utilized questionnaire survey to collect data from 345 textile firms. Regression analysis and structural equation modelling is employed to test the research framework of supplier development, supplier performance, and trust of suppliers through AMOS. Indirect supplier development and direct supplier development practices affect supplier performance. Findings of the study show that supplier development practices improve supplier performance in textile industry. Buying firms’ trust is positively related to supplier performance improvement. As well as it mediates across supplier development dimensions and supplier performance improvement. The study emphasizes, the large-scale manufacturing buying firms need to trust its suppliers when engaged in supplier development practices in textile industry. Buying firm’s supplier development practices improve supplier performance. Additionally, buying firm’s trust positively, significantly, and partially mediate between supplier development dimensions and supplier performance improvement in textile industry of Pakistan.