Moderating effects of institutional factors on relationship quality: a comparative analysis of the US, Brazil, and China

Abstract

PurposeThe purpose of this research is to show how institutional factors affect buyer–supplier relationships. Specifically, the authors examine a model of relationship quality and its antecedents across rule-based, relation-based and family-based governance environments.Design/methodology/approachA conceptual model and accompanying research hypotheses are tested on data from a survey of 169 US (rule-based), 110 Brazilian (family-based) and 100 Chinese (relation-based) managers and buyers. Structural equation modeling is used to test the relationship quality framework and the hypothesized moderation of governance environment.FindingsResults suggest that the informal institutions which shape a nation’s governance environment impact the relationship building process between buyers and suppliers. Communication quality was found to influence relationship quality more in developed economies where relationships are protected and managed under rule-based governance. Interaction frequency was found to be more relevant in emerging market firms characterized by relation-based societies. relationship benefits are applied more to relationships in emerging markets operating under family-based governance. No differences were found across governance environments for the influence that conflict resolution has on relationship quality.Practical implicationsResults provide insight into how the fairness and effectiveness of political and economic institutions surrounding a buyer’s nation of operation impact “rules of the game” differently for developed and emerging market firms.Originality/valueThis study extends research on cross-cultural relationship marketing to more than just communications context and cultural heritage. Results demonstrate that a buyer’s quest for legitimacy impacts its sensitivity to what supplier behaviors matter the most.