Favor Reciprocity, Innovation, and Inefficiency: The Double-edged Sword of Business-to-Business Wasta Relations

Abstract

Purpose – The purpose of this study is to empirically investigate the dark side of business-to-business (B2B) relationships in traditional business practices worldwide that rely on strong networks. Design/methodology/approach – This study applies a questionnaire survey to collect data from buyers in 224 Kuwaiti firms and uses the partial least squares structural equation model for data analysis. Findings – Drawing on the social exchange theory, we test the relationships between B2B wasta, relationship satisfaction, innovation and efficiency. The findings show that despite the belief that wasta brings long-term benefits when applied in B2B relationships, it negatively impacts the firm’s efficiency. Originality/value – This study contributes to the existing literature on B2B relationships by identifying important issues related to the multifaceted nature of B2B wasta relationships. The study confirms the importance of relational and innovation benefits over economic consequences based on elements of social exchange theory, which extends our current understanding of the application of SET in B2B wasta relationships.