A seller perspective on economic and non-economic satisfaction as precursors to formalisation, specific investments and dependence in business relationships

Purpose: Seen from the seller's point of view, this study examines economic and non-economic satisfaction as distinct conceptual variables, and tests how the constructs relate to each other and to the business transactional cost variables of formalisation, specific investments and dependence. Design/methodology/approach: Data was collected from 213 key informants from Norwegian companies involved in business-to-business marketing. Structural equation modelling was used to test the posited hypotheses. Findings: The findings show that sellers' economic satisfaction exerts a positive influence on non-economic satisfaction and on formalisation, while its posited influence on specific investments was not found to be significant. Formalisation was, however, not significantly influenced by seller non-economic satisfaction. Specific investment was positively influenced by seller non-economic satisfaction. The influence of formalisation on specific investments and dependence was significant. Specific investments were also found to be positively influenced by dependence. Research limitations/implications: The study reveals the importance of assessing both economic and non-economic satisfaction in trying to understand sellers' behaviour in business-to-business markets. Practical implications: The findings show the need for managers to ensure economic satisfaction, as its affects non-economic satisfaction. Originality/value: This study contributes to a better understanding of satisfaction in business-to-business exchange relationships and its relationship with transactional cost constructs based on a seller's perspective.