The value creation scale of supplier-distributor relationship in international markets

Abstract

Purpose– The purpose of this study is to develop a value-creation measurement which is applicable to the supplier–overseas distributor relationship. As cross-border cooperation is increasingly important, there is yet no appropriate scale to measure the relationship value between the supplier and the distributor in cross-boundary context.Design/methodology/approach– With a view to establishing the measurement scale for the relationship value created between manufacturer and its overseas distributor, this study uses exploratory factor analysis, confirmatory factor analysis (CFA) and regression to test reliability, convergent validity, discriminant validity and nomological validity of the scale.Findings– The scale is made up of six factors, including “customer service”, “relationship interaction”, “cost reduction”, “product promotion”, “product sales” and “information offering”; subsequent statistical tests strongly support the measurement.Research limitations/implications– First, the sample collection was not conducted randomly, and the sample was limited to 190 valid questionnaires. Future research might be conducted randomly or in a longitudinal fashion to increase the sample size. Second, this study focuses mainly on manufacturers in the mechanical parts industry and was conducted unilaterally to discuss the creation of relationship value. It is suggested that future researchers investigate relationship value generated in cross-border cooperation from a bilateral perspective or discuss cooperative relationships in other industries.Practical implications– This study creates a functional scale to measure the supplier–distributor value creation in cross-border cooperation, and it proves that six factors pertaining to relationship value have significant positive correlation with operating performance; in this regard, in supplier–distributor cooperative relationship, more value the distributor creates for its supplier, the better the operating performance of the supplier will be.Originality/value– In the academic sense, this measurement will be of substantial help to future empirical research on a larger scale. When applied to practice, this measurement supplements the extant body of value-measuring tools and works as an evaluation index for choosing overseas distributor.