The Litigated Dissolution of International Distribution Relationships: A Process Framework and Propositions

Abstract

The litigated dissolution of international distribution relationships severely hampers exchange partners’ international efforts. Although relationship dissolution through litigation is a central issue in international business, limited research has been conducted to understand this process, thus leaving academics and practitioners with an incomplete theoretical or practitioner understanding of issues involved in this process. This study uses a systematic analysis of legal cases over the 1985–2005 period to better understand this issue from a longitudinal perspective. Using legal case data, the authors develop a process framework, which includes formalized propositions, to denote two separate litigation dissolution processes: proactive and reactive. The legal case analysis indicates that the two types of relationship dissolution processes have unique triggers and outcomes, which suggests differences in theoretical models and managerial actions. The authors present academic and practitioner implications.