Factors affecting trust between Korean IT firms and their Chinese counterparts

Trust is important in that it facilitates relational exchanges by permitting partners to transcend short-run inequities or risks to concentrate on long-term profits or gains. This study investigates what factors affect the trust between distribution-channel members, principally those between Korean IT firms and their exporting partners in China. We suggest that factors affecting trust include reputation, size, expertise, length of the relationship, communication, and satisfaction with previous outcomes of conflict episodes. Data were collected through a survey of 128 Korean IT firms, which have export-transaction relationships with Chinese buyers. The data strongly support the research hypotheses. As hypothesized, the results of data analysis show that reputation, communication, and satisfaction with previous outcomes tend to enhance trust. Additionally, we noticed that trust seems to decrease as the experience of conflict episodes increases.