Drivers of Commitment and its Impact on Performance in Cross-Cultural Buyer-Seller Relationships: The Importer's Perspective

Abstract

Much of the recent literature on interorganizational relations provides evidence that relationship commitment can produce significant benefits for firms. Somewhat surprisingly, limited attention has been devoted to the role that commitment plays in international buyer-seller associations. Merging findings from the international business and transaction cost economics literature, we propose and test a model that explains how commitment develops and its impact on performance in cross-cultural interorganizational relations. A sample of 216 overseas distributor–manufacturer relationships provides the empirical setting for this research. The findings suggest that transaction specific investments by the importer and exporter opportunism affect importer commitment, and that environmental volatility and cultural sensitivity are indirectly associated with commitment through opportunism. Most important, the study reveals that an importer's commitment has a positive impact on its performance in the relationship. However, no relationship is established between environmental volatility and commitment. The implications of the study are discussed, along with limitations and directions for future research.