Inter-firm Trust Research Articles

Inter-firm dependence, inter-firm trust, and operational performance: The mediating effect of e-business integration

The objective of this paper is to examine the relationships of relational governance, e-business integration, and operational performance in a supply chain context. We operationalize relational governance with inter-firm dependence and inter-firm trust to build a structural model. The empirical analysis of our survey data collected from manufacturing firms reveals that e-business integration significantly mediates the effects of inter-firm dependence and inter-firm trust on operational performance. The present work justifies the mediating mechanism of e-business integration and advances the understanding of the impact of relational governance on operational performance. The findings contribute to research and practice in e-business and supply chain management.

Two Forms of Trade Credit Finance in China

This paper investigates which forms of trade credit finance which corporate activities of non-state-owned enterprises in China, comparing coastal and interior areas. Using firm-level panel data for 1998–2007, we find: (1) trade credit in China supports investment by non-state owned-enterprises; (2) trade credit in the form of notes and accounts payable is more developed and actively used to finance investment in the coastal areas compared with the interior; and (3) the dominant and significant form of trade credit changes from deposits received to notes and accounts payable, likely driven by development of interfirm trust and increasing market competitiveness.

Trust in Construction Projects: Literature Analysis Using Keywords

Communication risk is one of the most important varieties of risk that occur in construction projects, and trust is one of the most effective strategies to minimize it. For that reason, trust has been playing an increasingly important role in the construction management literature. Interest in communication risk and trust spans psychology, sociology, and economics. These social sciences are most relevant for the understanding of different dimensions of trust investigated in the context of construction project management. In construction projects, this applies to interpersonal, intra-firm, and inter-firm relationships between the project parties. This analysis of the construction management literature uses keywords containing trust and related concepts. Keywords have become important parts of academic papers, and they are crucial in the literature search. The present analysis of literature shows that a large proportion of research to date has been dedicated to the study of inter-firm trust in construction, most of which concerns long-term relationships, such as partnerships and alliances. However, this analysis demonstrates that there has been relatively little research dedicated to the study of interpersonal and intra-firm trust in construction. Future research needs to address these neglected areas.

Determinants of Inter-Firm Trust in a Tourism Region

Many scholars hold that trust is one of the key in searching for inter-firm cooperation. But there are few studies to investigate the antecedent of inter-firm trust. The aim of the research is to identify the main determinants of inter-firm trust in tourism region. With an empirical study of 262 enterprises in a tourism region in Vietnam, the study finds that characteristics of firms and its executives do significantly positively affect inter-firm trust. The result also reveals that communication and sharing information, using social network in inter-firm relationship will facilitate trust between partners. The result support the general thesis that executive can build and develop inter-firm trust based on its main determinants. The study provides both theoretical and practical implications.

English

English

Why does loyalty–cooperation behavior vary over buyer–seller relationship?

This study argues that a favorable relationship (with trust and commitment) existing between two parties might not necessarily guarantee that subsequent transactions or partnerships can be stabilized. Each party in a relationship is required to conduct specific investments on behalf of the other to prevent discontinued trading or transaction relationships. Hence, this study combines relationship marketing and specific asset investment concepts within the transaction cost theory to investigate the relationship between inter-firm trust and commitment and loyalty and cooperation. By focusing on listed and over-the-counter-traded companies in Taiwan of industries that possess complete supply chains, this study collects 153 effective surveys for empirical analysis. The results show that commitment is more important than trust in a business-to-business (B2B) relationship for increasing the willingness of business customers and/or partners to participate in specific asset investments, thus increasing their loyalty and cooperation in the B2B relationship.

Interpersonal Factors as Drivers of Quality and Performance in Western–Hong Kong Interorganizational Business Relationships

The authors report the findings of a study conducted among a sample of 202 Hong Kong–based Chinese importing companies regarding their working relationships with Western export manufacturers. In particular, the study emphasizes the effect of interpersonal factors on financial performance through the intervening roles of intercompany trust and relationship quality. Using structural equation modeling, the authors confirm that (1) several interpersonal relational dimensions—namely, personal communication (sijiao), personal credibility (xinyong), and personal affection (ganqing)—positively influence interfirm trust; (2) trust plays an instrumental role in enhancing the components of the interfirm relationship quality (i.e., cooperation, commitment, and satisfaction); (3) interfirm relationship quality is positively related to superior financial performance; and (4) most of the associations between each of the interpersonal factors and interfirm trust were moderated by the importer's size and foreign supplier's origin as well as by the length of the relationship and which party initiated the relationship. The authors extract several conclusions and implications from the findings and provide directions for further research.

An Empirical Study on the Impact of Guanxi and Trust on External Financing Efficiency in Clusters

Financing is a critical bottleneck problem in the development process of SMEs. SMEs’ business activities are more closely embedded in the network, because the geographical location closeness facilitates the exchange of information and the diffusion of knowledge. We try to explore how the cluster network relations affect the efficiency of SMEs external financing efficiency. This paper takes a close look at firm financing patterns and factors that influence external financing performance of SMEs in clusters. However, our results suggest that financing from bank is the main financing pattern. We also find inter-firm trust is positively related with external financing efficiency and this positive relationship is moderated by the level of Guanxi. Theoretical and managerial implications are discussed.

Industrial cluster involvement, organizational learning, and organizational adaptation:an exploratory study in high technology industrial districts

Purpose– The primary purpose of this study is to examine the relationships among a firm’s industrial cluster involvement, organizational learning and its ability to successfully adapt to external environment.Design/methodology/approach– Field survey research method was used, and data were collected from 943 high-technology companies in the USA, China, Taiwan and Sweden. Multiple regression analysis, as well as mediation test, was conducted to analyze the data.Findings– The study finds that being positioned in an industrial cluster enhances a firm’s learning and further leads to a firm’s desired adaptive outcomes.Research limitation– Using self-reported data could be a potential limitation of this study. It would be preferable to have other forms of data for a study. Further, cross-cultural comparisons are needed to enhance our understanding in this multicultural setting.Practical implication– The findings provide business executives, as well as policymakers, a new way of thinking in respect to how to develop holistic learning practices and improve inter-firm trust to appropriately adapt to the fast changing environment.Originality/value– The major contribution of this study is an initial attempt to provide a comprehensive approach in analyzing a firm’s industrial cluster involvement. Further, the study attempts to empirically examine learning and cluster involvement in relation to organizational adaptation.

Management control systems, trust and risk in inter-organisational relationships: The case of Francisco González de la Sierra and its partner Rivas y Cantallops (1847–1864)

This article is intended: (1) to provide evidence about the practices in the nineteenth century of inter-organisational relationships when parties accepted sharing performance risks; and (2) to contribute to reducing the gap about the trust–control system dynamic interaction and its effect on risk through empirically analysing a non-contemporary setting. Our study analyses the ongoing relationship of a small commercial company with its main partner during the period 1847–1864, and examines the formal systems used by the company to monitor and coordinate its partner's activity and the evolution of inter-firm trust throughout the whole life cycle of this relationship.

Industrial cluster involvement, organizational learning, and organizational adaptation: an exploratory study in high technology industrial districts

Purpose The primary purpose of this study is to examine the relationships among organizational learning, inter-firm trust and a firm’s ability to successfully adapt to external environment. Design/methodology/approach Field survey research method was used and data were collected from 943 high technology companies in US, China, Taiwan and Sweden. Multiple regression analysis as well as mediation test were conducted to analyze the data. Findings The study finds that being positioned in an industrial cluster enhances a firm’s learning and further leads to a firm’s desired adaptive outcomes. Research limitations/implications Using self-reported data could be a potential limitation of this study. It would be preferable to have other forms of data for a study. Further, cross-cultural comparisons are needed to enhance our understandings in this multicultural setting. Practical implications The findings provide business executives as well as policy makers a new way of thinking in respect to how to develop a holis...

Using Resource–Based Theory to Help Explain Plural Form Franchising

Agency theory is the dominant explanation for entrepreneurs’ decisions about how much to grow through franchising vis–à–vis company ownership. We introduce a resource–based explanation and submit that the proportion franchised is influenced by efforts to organize franchisor–owned and relational strategic assets so that their value can be best leveraged to meet key strategic goals. Using data from 168 franchisors, we found that relational (i.e., interfirm trust and knowledge–sharing routines), but not franchisor–owned (i.e., brand reputation and operating routines), strategic assets influence the proportion franchised. The study offers preliminary evidence that resource–based theory has merit as a complementary explanation for franchising.

프로젝트 공급망 참여기업의 신뢰와 관계적 규범이 기업 간 협업 및 갈등 그리고 성과에 미치는 영향연구

복잡다단한 프로젝트 기반의 공급망관리는 여러 협력업체와의 지속적인 통합노력이 요구된다. 본 연구의 목적은 프로젝트 공급망에 참여한 바 있는 협력업체들의 성과를 최종적인 종속요인으로 설정하고, 기업 간 협력과 갈등, 신뢰와 관계적 규범 등과 같은 주요 선행요인 간의 상호연관관계를 분석하는데 있다. 프로젝트 공급망 참여기업으로부터 조사한 설문데이타를 토대로 분석한 결과, 기업간 협력과 갈등은 성과에 영향을 미치며, 기업 간에 인지되는 신뢰는 협력과 갈등관계에 영향을 미친다는 것을 확인할 수 있었다. 다만 관계적 규범은 협력관계에는 영향을 미치지만 갈등해소에는 유의한 영향을 미치지 못한다는 통계적 결과가 도출되었다. 본 연구의 분석결과가 프로젝트 기반의 공급망 운영에 관한 의미있는 시사점을 제시해 줄 수 있을 것으로 사료된다. Supply chain management for complex project requires continuous integration activities with the suppliers and subcontractors. This study proposes the firm performances, trust, relational norms, interfirm conflict and cooperation as major research variables, and collected the survey responses from the suppliers and subcontractors having experiences with complex projects. The statistical results indicate that the cooperation and conflict influence the firm performances, and that the inter-firm trust have some impact on the level of cooperation and conflict. It was also found that the inter-firm cooperation is influenced by relational norm. But on the contrary to our expectation, the relational norm has no significant impact on the inter-firm conflict. These findings may offer the significant implications leading to successful implementation of collaborative supply chain management in the context of project engineering area.

Influence of Relationship between Supply Chain Members on Innovation Performance

In order to pursue development in fierce competition, enterprises have attached greater and greater importance to their innovation abilities. This paper analyzes the theory model about how the relationship between supply chain members can influence innovation performance. It is found that inter-firm trust and learning can help to promote relationship governance, and further enhance the innovation performance of the enterprises.

Determinants of international telecommunications alliance form in emerging markets

Purpose – The purpose of this study is to attempt to explore how host governmental restriction and interfirm trust influence telecommunications operators (telcos) to choose international telecommunications alliance forms among equity alliances, relational alliances and recurrent alliances in three emerging markets: China, Hong Kong and Taiwan. Design/methodology/approach – This study utilizes multiple discriminant analysis to analyze 111 international alliances established in China, Hong Kong and Taiwan during 1993-2004. Findings – This study finds that host governmental restriction exerts greater influence on the choice of alliance form than interfirm trust. Telcos tend to develop non-equity alliances when governmental restriction is strong. In addition, they tend to develop equity and relational alliances when interfirm trust in high. Research limitations/implications – Two limitations are: this study only explores the impacts of a number of factors (host governmental restriction and interfirm trust) on alliance form choice, and it only focuses on bilateral alliances in telecommunications services industry. This study suggests that future study should explore other strategic factors (e.g. firms' capability, competitors' strategy) and multi-lateral alliances. Practical implications – This study provides three managerial suggestions. First, when international telcos establish alliances in emerging markets, they should primarily evaluate host governmental restrictions, and second assess interfirm trust. In addition, if local telcos intend to build relational and equity alliances to acquire international telcos' technology and marketing know-how, they should enhance interfirm trust with them. Lastly, when host governments attempt to attract foreign equity investment, they should remove restrictions on foreign ownership and provide support and friendly regulatory institutions. Originality/value – Most literature about telecommunications service industry focuses on developed markets and uses descriptive or case analysis. To fill these research gaps, this study conducts an empirical research by analyzing the international alliances in three emerging markets: China, Hong Kong and Taiwan. The findings not only provide suggestions to international telcos, local telcos and host governments in these markets but also can be applied to other emerging markets.

Inter-Firm Trust Production: Theoretical Perspectives

Although inter-firm trust plays a crucial role in inter-firm relationships that involve uncertainty, limited researchhas devoted to make a full review on inter-firm trust. The objective of the study is to investigate the sources ofinter-firm trust in order to give a basement for building inter-firm trust. Drawn from many disciplines such asrelationship marketing, social exchange theory, management, etc., this study has built the conceptual model tofacilitate trust between partners in inter-firm relationships intentionally. The paper contributes to the knowledgeof inter-firm relationships based on viewing trust from many perspectives. The paper also proposes somehypotheses related to inter-firm trust development which will be checked by future research.

How does interfirm trust influence radical innovation in R&D alliance?

Interfirm trust is of critical importance for R&D alliance. However, it is not clear how the relationship between interfirm trust and innovation performance works. This study provides a better unde...

An Exploratory Study on Antecedents of Inter-firm Networking among Small Venture Businesses

This paper investigated the antecedents of inter-firm networking among small manufacturing firms. We highlighted some of the past and current researches relating to inter-firm network-ties including these theories: resource based view, alliance capabilities, trust and inter-firm alliance. Thus, the objective of this paper is to review different explanations of the antecedents of inter-firm networks that affect the formation of alliance among small firms, and to integrate them into combined framework approach. Overall, resource needs, (such as resource capability, alliance capability) and trust (such as inter-firm trust, inter-personal trust) these factors emerge as central in the paper. To test the proposed research model, data were collected from a sample of 367 small and medium-sized manufacturing ventures. Our empirical findings demonstrated that resource capability (complementary resources) has no significant association with formation of inter-firm alliance while alliance capabilities and trust showed partially significant relations with the inter-firm alliance formation.

The differential impact of trust types on inter-firm relationships: Some empirical evidences from the Japanese eyeglass industry

By considering the business context of Japanese firms, this study aims at investigating two forms of trust (that is rational and relational) and how they are affected by the nature of the relationship between business partners. It also examines the impact of trust, directly on cooperation and indirectly on performance. A survey of a sample of 68 Japanese eyeglasses manufacturers was conducted and analysed by Structural Equation Modelling. Relational-specific adaptation was found to impact strongly on a partner's relation-based trust. On the other hand, coercive power was found to have a negative effect on relational and rational trust. From the study, two important facets of Japanese inter-firm trust were revealed. First, that the generation paths of trust forms are different; and second, that relational trust has a stronger explanatory power in cooperation and performance than rational trust.

Impact of Inter-firm Relationship Fairness in Strategic Alliance on Relationship Commitment -- Mediating Effects of Inter-firm Trust

As one of the core influencing factors of inter-firm relationship, relationship commitment has an important effect on the continuity of the inter-firm cooperative relationship and the enhancement of cooperative performance. By selecting 230 enterprises in Jiangsu as the study samples, collecting data through questionnaires and using an intermediary model, the impact imposed by inter-firm relationship fairness on the relationship commitment is studied and the mediating effect of inter-firm trust is testified in this paper. The results show that a route by which the relationship fairness affects the relationship commitment does exist in the sector of inter-firm cooperative relationship in China. Among them, distributive fairness can not only promote affective commitment directly, but also in the meantime bring in an indirect effect on the affective commitment through talent trust, while procedural fairness imposes positive impacts on affective commitment mainly by talent trust, the mediating variable. Besides, the improvement of interaction fairness can directly reduce the level of inter-firm calculative commitment on the one hand, and meanwhile helps to improve the inter-firm benevolent trust level and indirectly affects the calculative commitment on the other hand. Key words: Relationship fairness; Relationship commitment; Inter-firm trust; Mediating effect