Manufacturer governance of foreign distributor relationships: do relational norms enhance competitiveness in the export market?

Abstract

Research on international marketing channels accentuates the importance of relational norms and trust-building activities between buyers and sellers. Indeed, cultural and country differences may limit the use and effectiveness of traditional tools (such as market incentives and authoritative control) that govern the relationship between an exporting manufacturer and its foreign distributor. Consequently, exporting manufacturers need to emphasize relationships with their foreign distributors. This research finds evidence that supports both direct and indirect effects between the manufacturer's use of governance via relational norms and its competitiveness in the export market. The indirect effect results from the mediating role of trust, a finding that makes a key contribution to the understanding of the role of relational governance in cross-border relationships.