The coexistence of transaction and relational marketing: Insights from the Chinese business context

Transaction and relational approaches to marketing have been promoted as alternative forms but recent evidence suggests that they may coexist. We explore this in the context of China. If firms operating in a highly relational society, such as China, exhibit transactional behavior, these two approaches must be compatible. We argue that Chinese values give rise to business practices consistent with both transactional and relational perspectives. These are summarized in six propositions for research. Theory building and managerial practice could benefit from thinking in terms of how elements from the two perspectives can be brought together rather than remain as alternatives.     

The many faces of trust and guanxi behavior: Evidence from marketing channels in China

This study examines how a trusting relationship influences firm boundary agents' guanxi behavior which involves saving face (wei hu mianzi), and affect investment (ganqing tou zi). At the individual level, we decompose trust into its competence and goodwill forms and examine their relative and interactive effects on guanxi behavior. A study conducted among 354 Chinese purchasing managers reveals that both competence trust and goodwill trust promote guanxi behavior, and these two types of character trust are substitutive for each other in terms of motivating the use of guanxi. At the firm level, calculative trust directly affects guanxi behavior and also negatively moderates the effect of competence trust on guanxi behavior. These results imply that calculative trust may substitute for competence trust in facilitating economic transactions and thereby reduce the use of guanxi in business interactions.     

Joint and interactive effects of trust and (inter) dependence on relational behaviors in long-term channel dyads

The authors investigate the effects of trust on the relational behaviors of firms in long-term channel dyads across different interdependence structures. Based on the long-term nature of the empirical setting, trust is posited to exert a positive effect on the emergence of relational behaviors in all interdependence conditions. This positive effect of trust is hypothesized to be stronger in highly and symmetrically interdependent channel dyads than in low-interdependence-type symmetric dyads. In addition, for both relatively more dependent and relatively less dependent members of asymmetric dyads, the effect size of trust is hypothesized to increase as the perceived level of interdependence asymmetry increases. Data collected from automobile dealers in Turkey reveal that trust in the supplier has the strongest positive effect on the relational behaviors of dealers in asymmetric dealer-supplier dyads that perceive themselves relatively less dependent than their suppliers. For relatively more dependent dealers, trust is found to exert a modest positive effect. In symmetrically interdependent dealer-supplier dyads, trust exerts a modest positive effect on dealer relational behaviors in the low mutual dependence condition, and this effect size reduces to the point of nonsignificance in the high mutual dependence condition. Theoretical and managerial implications of these findings are discussed.     

The determinants of relational governance and performance: How to manage business relationships?

It is the aim of this study to assess the influence of the determinants of the transaction, dyadic, and business environment level on relational governance and ultimately performance. We build an integrated framework for relationship management drawing from literature of transaction cost economics, marketing channels, and business networks. Dutch suppliers of potted plant and flower products (N=174) provided data for the empirical analysis. Our results show that joint planning, one of the constructs of relational governance, is positively influenced by interorganizational trust, information obtained from the network, physical transaction-specific investments (TSIs), and by fixed lines as the exchange mode. Joint problem solving, the other construct of the governance, is solely influenced by the two dimensions of trust. These two constructs of relational governance effect positively our performance measures. Managers should consider carefully each of the determinants of relational governance for the management of a relationship. As shown in our study, the success is dependent on some of the determinants of the three analytical levels of our integrated framework.     

The role of trust and relationship structure in improving supply chain responsiveness

In order to reduce cycle times between supply chain entities, managers must work to create new relational forms that rely on trust to a greater extent. We present a model suggesting that to build relationships based on trust, suppliers must invest in site-specific and human assets, and buyers must judiciously apply contracts to control for relative levels of dependence within the relationship. Our model also suggests that buyer-dependence, supplier human asset investments, and trust are all positively associated with improved supply chain responsiveness, defined in this study as the supplier's ability to quickly respond to the buying party's needs. This model is tested with data gathered from a sample of purchasing managers in North American manufacturing firms. The results suggest that even in cases when buyers do not have a great deal of control over their suppliers, working to build trust within the relationship can improve supplier responsiveness.     

Performance implications of distributor effectiveness, trust, and culture in import channels of distribution

Recent research has highlighted the need to examine international channels of distribution from the viewpoint of the industrial distributor, with a focus on how distributors may add value to their channel relationships. The present research responds to such calls and focuses on the value added in terms of the extent of channel functions undertaken by the distributor on behalf of export-manufacturers. Trust is also examined as a source of added value that may be particularly important for cross-cultural relationships. Trust is investigated for its mediating effects on otherwise detrimental effects of cultural value differences. We also examine the presence of explicit legal contracts used to govern channel relationships and find that the use of such contracts may also hinder distributor perceptions of performance.     

Joint venture stability and cooperation: Direct, indirect and contingent effects of resource complementarity and trust

Despite the increased use of JVs and other forms of alliances, research shows that most collaborative arrangements end in failure due to relationship and resource sharing problems. We note that extant research and practice in this area has tended to emphasize structural and partner selection issues, often at the expense of the relationship and resource development processes which promote ongoing stability and cooperation. This paper presents a view of JV formation and success grounded in the Resource-Advantage (R-A) theory of competition. Our results illustrated the distinct effects of resource complementarity and trust upon JV stability and cooperation. Further, we found that trust was most influential in newer JVs, while the presence of resource complementarity was more critical in older ventures. For firms with greater (less) JV experience, resource complementarity (trust) between the partners was more critical for attaining JV outcomes.     

How value and trust influence loyalty in wireless telecommunications industry

Despite making significant investments in enhancing the customer service experience, long-term customer loyalty remains an elusive dream for many service providers. Particularly in the telecommunications industry, switching providers even from within continuous contract relationships is easy and companies struggle to retain their customers. Trust and value are considered cornerstones of long-term relationships, so it is perhaps surprising that previous research on how relationship age and usage level actually affect value, trust and loyalty is inconclusive. The current research is set in the telecommunications services field and draws on a large-scale survey undertaken in Finland. The findings support the contention that perceived value relates positively to loyalty, and that trust mediates that relationship. Surprisingly, in the telecommunications industry, increasing relationship age and usage level strengthen neither value and loyalty nor the links between trust and loyalty. The results may be explained by the unique characteristics of the highly competitive mobile telecommunications sector, and confirm the view that loyalty does not pay without strategies that value long-term customers and thereby build trust with new customers.     

Export intensity and marketing in transition economies: Evidence from China

Firms in transition economies face a common adaptation problem of having to compete within increasingly marketized environments. This creates a need for managers to learn skills associated with marketing, such as those pertaining to the development of new and better products. Although distance is usually a barrier to learning, we propose that in exchange situations involving transition economy firms, the benefits of long-distance trade may outweigh the costs of knowledge acquisition. We find support for this proposition in this study by establishing a link between the export intensity of Chinese exporters and their acquisition of marketing know-how. We also find evidence that the marketing knowledge of transition economy firms has a positive effect on overall performance.     

The effects of trust and land administration on economic outcomes: Evidence from Vietnam

This paper examines how the interaction of social trust and institutions, such as land administration, affects household economic decisions in Viet Nam. Using a panel dataset of rural households from 2008 to 2014, we show that negative consequences of the duration of land administration on agricultural investment have been lower in rural households with higher level of trust. Higher-trust households, when facing higher barrier from land administration, tend to invest more on agricultural land compared to low-trust households where household heads are male. We also find that high-trust households enhance land property rights when facing obstacles from land administration.     

Market and supplier characteristics driving distributor relationship quality in international marketing channels of industrial products

Although we are beginning to comprehend the fundamental importance of relationship quality in interorganizational exchange, a relatively small, but growing, body of literature that has not kept pace with the tremendous growth in global channel transactions has been devoted to the development of cross-border relationship quality. This study addresses this gap in the literature by investigating the extent to which certain market and exporter characteristics affect the development of relationship quality in the context of importing distributors trading with exporting manufacturers of industrial products. Relationship quality is viewed as a higher-order construct composed of trust, commitment, and satisfaction. Findings reveal that psychic distance is related negatively to relationship quality, while transaction-specific investments and role performance are associated positively with relationship quality. No link is found between environmental uncertainty and relationship quality. Managerial implications of the findings are considered and limitations along with future research directions discussed.     

Explaining alliance success: Competences, resources, relational factors, and resource-advantage theory

Business alliances, by filling critical resource gaps, enable firms to have positional advantages that lead to superior financial performance. Some alliances, however, are more successful than others. The three prominent theoretical approaches to explaining alliance success rely on resources, competences, and relational factors. The authors theorize that the three approaches are interdependent and, using resource-advantage (R-A) theory as a framework, develop an integrative model. This model proposes that the three approaches are linked by means of relationships among (1) alliance competence, (2) complementary resources, (3) idiosyncratic resources, and (4) cooperation. A test of the model, using a sample of alliance professionals, finds support for the theory that the three approaches are, indeed, interdependent and that resources, construed in the manner of R-A theory, influence alliance success through positional advantage.     

Relationship marketing and brand involvement of professionals through web-enhanced brand communities: The case of Coloplast

More and more firms are recognizing the advantages of web-enhanced brand communities as a lever for relationship-marketing communication. Brand communities not only provide companies with an additional communication channel, but also allow the possibility of establishing linkages to devoted users. So far, brand community has only been discussed in relation to B2C marketing. However, the effect of using web-enhanced brand communities in a business-to-business (B2B) context may be even greater, inasmuch as professional users have a strong and long-standing interest in exchanging product-related information. Based on the Coloplast case study, this contribution outlines a conceptual model for linking web-enhanced brand community activities and relationship building in B2B markets.     

Relationship marketing and brand involvement of professionals through web-enhanced brand communities: the case of Coloplast

More and more firms are recognizing the advantages of web-enhanced brand communities as a lever for relationship-marketing communication. Brand communities, not only provide companies with an additional communication channel, but also allow the possibility of establishing linkages to devoted users. So far, brand community has only been discussed in relation to B2C marketing. However, the effect of using web-enhanced brand communities in a B2B context may be even greater inasmuch as professional users have a strong and long-standing interest in exchanging product-related information. Based on the Coloplast case study, this contribution outlines a conceptual model for linking web-enhanced brand community activities and relationship building in B2B markets.     

Cluster and performance in foreign firms: The role of resources, knowledge, and trust

Clustering, the grouping of firms in close geographic proximity to one another, can enhance the performance of affiliated firms by providing access to complementary resources. Despite that some studies have produced empirical evidence supporting the positive impact of clustering, other studies have found no such evidence. Consequently, the consideration of clustering alone to explain differences in firm performance may be insufficient. This study seeks to determine whether the enhancement of firm performance comes as a consequence of clustering at the location level, interorganizational trust at the relationship level, or resource and knowledge management (i.e., the mechanisms of system dependence) at the firm level. Examining a sample group of Taiwanese manufacturers investing in China, we find that interorganizational trust, resources, and the mechanisms of system dependence all have a positive impact on performance. Further, we find that resources interact with clustering to positively impact firm performance.     

Development of special forms of B2B relationships: Examining the role of interpersonal liking in developing Guanxi and Et-Moone relationships

The paper examines the driving factors of two of the special forms of relationships that exist in Eastern countries namely Guanxi (China) and Et-Moone (Saudi Arabia). The paper argues that these special forms of relationships that have been found to significantly influence business-to-business relationships in these countries are primarily motivated by the presence of strong interpersonal liking. To do this, a conceptual model has been developed within which interpersonal liking is placed as the key mediating variable. The key outcomes of interpersonal liking are trust and Guanxi (in the Chinese sample) and Et-Moone (in the Saudi sample). Because Guanxi has received significant attention both conceptually and empirically, the research started by conducting in-depth interviews in Saudi Arabia to further explore the concept of Et-Moone. Survey data was collected from 401 businesses in China and Saudi Arabia. Using structural equation modelling, the model has been supported in both samples. The findings show that interpersonal liking plays a crucial role in the development of Guanxi and Et-Moone. Managerial implications and future research are discussed.     

Collectivist values for learning in organizational relationships in China: the role of trust and vertical coordination

Partners must engage in integrative interaction in order to combine diverse expertise and experiences into effective learning. Results from 103 pairs of customer and supplier organizations in China indicate that trust and vertical coordination are useful ways to characterize this integrative interaction and together they promote learning. Structural equation analysis suggests that collectivist but not individualist values are important foundations for integrative interaction between partners that result in learning. These findings were interpreted as reaffirming the value of effective relationships for coordination between partners and suggesting that collectivist values can be a source of effective organizational relationships.     

Investing in guanxi: An analysis of interpersonal relation-specific investment (RSI) in China

This study contributes to a more comprehensive understanding of relation-specific investment (RSI) in interfirm exchanges by introducing a construct for interpersonal RSI. Drawing on economic sociology and qualitative findings, we examine interorganizational RSI and interpersonal RSI as distinct constructs and uncover their roles in relationship performance. In particular, our study focuses on the Chinese interfirm context, in which interpersonal RSI, based on the indigenous practice of guanxi (cultivating social connections), is known as guanxi investment. We adopt a qualitative approach to explore the elements of guanxi investment, and then develop a behavioral measurement scale as a tool for further research. We employ an empirical survey to test and affirm the validity of the scale. The results confirm that in addition to their respective effects, interorganizational and interpersonal RSIs exert an interactive effect on interfirm relationship performance. We offer managerial implications for firms that operate in China.     

The impact of transactional and relational strategies in business markets: An agenda for inquiry

The impetus for the special issue of Industrial Marketing Management is the importance of understanding the implications of transactional and relational strategies in business-to-business contexts. The objective of the special issue is to integrate conceptual and empirical research in this area. We highlight research that extends current thinking in the area to ensure that this special issue serves an impetus for future research on this important topic.     

Industrial tail exposure risk and asset price: Evidence from US REITs

In this study, we investigate the impact of industry-based tail dependence risk on the cross-section of stock returns. To this end, we propose a novel tail risk dependence measure (industrial tail exposure risk [ITER]), which captures the tail risk exposure of individual stocks to multiple industries. Using US equity real estate investment trusts (REITs) data from 1993 to 2020, we document that stocks in the highest ITER portfolio outperform stocks in the lowest ITER portfolio by 8.40% per annum. This positive return spread is significant even after controlling for well-known firm characteristics. The return premium of ITER is stronger for small, value, and highly levered stocks and is substantially high during recession periods. Finally, the effects of ITER are cross-sectionally more associated with REITs that have greater degrees of the following factors: bivariate tail exposure risks of major industries, exposure to local industry tail risk, geographical concentration, and ownership of home-biased investors. Overall, our results suggest that REIT investors are indeed averse to tail risks that are associated with various sectors.