International Buyer-seller Relationships Research Articles

Vertical Integration and Foreclosure: Evidence from Production Network Data

This paper studies the prevalence of potential anticompetitive effects of vertical mergers using a novel data set on U.S. and international buyer-seller relationships and across a large range of industries. We find that relationships are more likely to break when suppliers vertically integrate with one of the buyers’ competitors than when they vertically integrate with an unrelated firm. This relationship holds for both domestic and cross-border mergers and for domestic and international relationships. It also holds when instrumenting mergers using exogenous downward pressure on the supplier’s stock prices, suggesting that reverse causality is unlikely to explain the result. In contrast, the relationship vanishes when using rumored or announced but not completed integration events. Firms experience a substantial drop in sales when one of their suppliers integrates with one of their competitors. This sales drop is mitigated if the firm has alternative suppliers in place. These findings are consistent with anticompetitive effects of vertical mergers, such as vertical foreclosure, rising input costs for rivals, or self-foreclosure. This paper was accepted by Joshua Gans, business strategy. Funding: This work was supported by a Banque de France/Sciences Po Partnership. Supplemental Material: The data files and online appendices are available at https://doi.org/10.1287/mnsc.2022.4363 .

Addressing psychic distance and learning in international buyer-seller relationships: The role of firm exploration and asset specificity

The psychic distance paradox refers to inconclusive findings on whether psychic distance hinders cross-border performance. To examine the paradox in international buyer-seller relationships, we consider sub-dimensions of relationship learning: information sharing, joint sense-making, and knowledge integration. Our findings show firm exploration and asset specificity perform distinctive and complementing roles in addressing psychic distance. Firm exploration mitigates psychic distance challenge on both information sharing and joint sense-making. In contrast, asset specificity only alleviates psychic distance challenge on knowledge integration. Overall, this study extends understandings of the psychic distance paradox by specifying contextualized learning and critical contingencies in international buyer-seller relationships.

How and when does co-production facilitate eco-innovation in international buyer-supplier relationships? The role of environmental innovation ambidexterity and institutional pressures

Eco-innovation is an important element of a firm's environmental sustainability strategy and provides both competitive and environmental benefits, resulting in a win-win solution. Although previous studies have examined the influence of co-production on innovation, little is known about how and when co-production affects eco-innovation in the context of international buyer-seller relationships. Building upon the resource-based view, the dynamic capability perspective, and institutional theory, this study develops a conceptual model focusing on the effects of co-production on eco-innovation, the mediating effects of environmental innovation ambidexterity, and the moderating role of institutional pressures. The research was carried out using a survey-based quantitative study and the proposed hypotheses were tested using the hierarchical regression analysis. The results of a survey of 124 OEM suppliers in Taiwan show that co-production has a positive effect on environmental innovation ambidexterity. Our findings also show that the direct relationship between co-production and environmental innovation ambidexterity is stronger when institutional pressures are high as opposed to when they are low and that environmental innovation ambidexterity mediates the relationship between co-production and eco-innovation. This study contributes to a theoretical understanding of why some firms develop more environmental innovation ambidexterity than others, by analyzing co-production as a predictor and institutional pressures as a moderator. We discuss the theoretical and managerial implications of our findings.

Manifest conflict, customer orientation and performance outcomes in international buyer-seller relationships

PurposeThe purpose of this paper is to test the impact of manifest conflict on performance outcomes. In particular, this paper aims to examine the moderating effect of the supplier’s customer orientation (CO) as perceived by the buyer on the conflict-performance outcomes relationships in international channel relationships.Design/methodology/approachA survey of 162 Australian importers was conducted to elucidate the associations among manifest conflict, CO and performance outcomes.FindingsManifest conflict was found to be negatively related to the importer’s evaluation of the exporter’s overall performance, which is consistent with previous work. However, CO was found to moderate the negative direct effect of manifest conflict on two outcome measures, “satisfaction with business outcomes” and the “evaluation of the exporter’s overall performance”. Moreover, it actually changed the effect from dysfunctional to functional for “evaluation of the exporter’s overall performance”. That is, CO changes the nature of the manifest conflict–outcome relationship by turning it from negative to positive.Research limitations/implicationsThis research helps answer the appeal for research on the conditions in which conflict causes dysfunctional and functional outcomes. From a practical standpoint, providing the importer views the exporter as being customer-oriented, conflict should not be avoided if it stems from disagreements that arise due to the exporter acting in the best interests of the importer. The power of CO in affecting the functionality of outcomes resulting from conflict should be highlighted.Originality/valueConflict is a fact of life in channel relationships, but little is known about its functional and dysfunctional effects (Frazier, 1999; Skarmeas, 2006). The empirical evidence largely points to conflict being dysfunctional; however, research also indicates that context can play an important role in moderating the functionality of conflict. In this paper the authors ask: what role does CO play as a determinant of the functionality of manifest conflict in channel relationships? They argue that the exporter’s CO changes the context in which the importer and the exporter interact and, thereby, changes the way in which the importer interprets the supplier’s actions.

Interfirm Relationships in Emerging Markets: The Importance of Relationships and Cultural Sensitivity

ABSTRACTWhile interfirm relationship value has attracted considerable attention in a domestic market context, little research has examined international buyer-seller relationships. This is surprising, as interfirm relationships across national borders have become increasingly important due to growing liberalization of world trade. Even less research is found including emerging markets. This study use cases with Norwegian seafood export to Turkey as illustrations of the importance of relationship value and cultural sensitivity when conducting business with an emerging country such as Turkey. The data is based on in-depth interviews of Turkish importers.

Betrayal in international buyer-seller relationships: Its drivers and performance implications

Although betrayal is a common phenomenon in inter-organizational cross-border relationships, the pertinent literature has remained relatively silent as regards its examination. However, the effects of betrayal are both long-lasting and destructive, and therefore an in-depth investigation of the factors that are driving it, as well as its performance outcomes, is considered necessary. Using a sample of 262 exporters, we confirm that betrayal in their relationships with foreign buyers is significantly and positively affected by relational uncertainty, opportunism, inter-partner incompatibility, relational distance, and conflict. The harmful effect of most of these factors on betrayal becomes stronger in the case of high foreign environmental uncertainty and high foreign market dynamism. The importer’s betrayal actions are in turn responsible for reducing relational performance. In fact, this negative association between importer’s betrayal and relational performance is more evident in relationships characterized by low dependence levels and low degrees of tolerance by the exporter.

Drivers and outcomes of importer adaptation in international buyer–seller relationships

Notwithstanding the growing literature on international buyer–seller relationships, limited attention has been given to the crucial role of adaptation in enhancing relationship performance, especially from the standpoint of the importer. This article reports the findings of a study, conducted among 167 British importers, focusing on the factors that drive their adaptation in the working relationship with Western European or U.S. export manufacturers, as well as its resulting performance outcomes. It was revealed that trust positively affects commitment and cooperation, while communication positively influences cooperation but has no effect on commitment. Both commitment and cooperation subsequently lead to importer adaptation. It was also found that adaptive importers tend to be more conducive to effective and efficient relationship outcomes. Finally, the study confirmed that both the links between adaptation and relationship effectiveness and adaptation and relationship efficiency are moderated by both the level of dependence on and distance from the exporter.

Expectations of Working Relationships in International Buyer–Seller Relationships: Development of a Relationship Continuum Scale

This study is an attempt to develop a scale to measure expectations of buyer–seller working relationships on a cross-cultural basis in the hospitality industry. The focus is on North American and Asian hotel salespeople. The scale development drew from previous research in guanxi relationships, purchasing, and selling strategies. While the results did not support a reliable unidimensional scale that could distinguish between transactional and collaborative working relationships, the methodology did create a framework for further scale development.

Do Cultural Differences Affect International Buyer-Seller Relationships?

Relationship marketing has been widely studied in a national context, however, little research has explored exchange relationships among international channel members. International relationships involve unique risks due to potential problems arising from transactions held between buyers and sellers of different cultural backgrounds. These cultural differences can negatively affect the development of relational outcomes such as trust and commitment, but the literature is not clear on this proposition. Two hypotheses are tested with Chilean importer firms. The results show that cultural differences do not affect the level of trust and commitment of exchange relationships between foreign suppliers and Chilean distributors. Theoretical and managerial implications are derived, and suggestions for future research are proposed.

The role of functional conflict in international buyer–seller relationships: Implications for industrial exporters

In their attempt to compete successfully in foreign markets, exporting firms must comprehend the decision-making and attitude of their overseas customers. Yet, there is a noticeable lack of research dealing with the import behavior of the firm. Focusing on import distributor firms trading with export manufacturers of industrial products, this study investigates the role of functional conflict in importer–exporter relationships. Results indicate that functional conflict is related positively to exporter cultural sensitivity and asset specificity and negatively to exporter opportunism. More importantly, importers' future purchase intentions are associated negatively with opportunism and positively with asset specificity and functional conflict. Theoretical and managerial implications of the findings are discussed along with suggestions for future research.

A Model for Assessing Cultural Impacts on International Buyer-Seller Relationships for Key Accounts of Hotel Companies

An understanding of the role of relationship building and the constructs that are important to developing business-to-business relationships can assist salespersons in developing successful strategies. Identifying what kind of relationships are acceptable and desirable is particularly important when operating internationally due to cultural influences. This article presents a model for examining international buyer-seller relationships in the hotel industry. The model was developed from literature in marketing, international business, and sociology as well as related literature in services and hospitality. Major constructs in the model are personal and work values as they relate to national culture, structural and social bonding, communication dimensions, trust, long-term orientation of the buyer, relationship commitment, and a continuum representing the range of potential relationships. Asia and North America are used to provide a frame of reference for examining international relationships within the model.

Are cultural differences overrated? Examining the influence of national culture on international buyer‐seller relationships

AbstractThe notion that differences in national culture influence international buyer‐seller relationships (and, indeed, all aspects of international management) is not only held as true but also axiomatic. This study questions the degree to which cultural differences impact upon buyer‐seller relations for seven key dimensions using Hofstede's indices of culture. Via two stages of data collection using two methodological approaches (seven interviews and 322 useable responses from a mail survey), the impact of culture on international buyer‐seller relationships was examined. The study's findings identified little evidence to support the popular idea that culture exerts a significant influence on international business relationships. Instead, the findings suggest that some managers perceived factors such as communication/language barriers, political barriers, geographic distance, economic factors, industry barriers, time differences, technology barriers, legal differences and infrastructure barriers as being more likely to have a greater impact on cross‐national relationships. Copyright © 2003 Henry Stewart Publications.

The Impact of Vertical Coordination on Ex Post Transaction Costs in Domestic and International Buyer–Seller Relationships

Even though the transaction costs framework has evolved considerably in the past decade, there is still only modest empirical knowledge about the governance performance implications of the theory. This article focuses on the governance performance of vertical coordination in relationships between manufacturing firms. On the basis of transaction cost analysis and related works in international marketing, the authors examine the impact of asset specificity and vertical coordination on ex post transaction costs in domestic and international buyer–seller relationships. In accordance with current literature in international marketing, performance measurement problems are expected to be more evident in international business trade than in domestic business-to-business relationships. The empirical findings show that under conditions with substantial asset specificity, vertical coordination reduces ex post transaction significantly more in international buyer–seller relationships than in domestic channel dyads.

The Cultural Dimension of International Buyer-Seller Relationships

ABSTRACT This paper explores the cultural dimension of organizing international buyer-seller relationships. Based on studies of national cultures, it is argued that economic actors will reproduce their social order when interacting across cultural boundaries. Differences in the organization of international buyer-seller relationships can thus be explained by cultural differences. When testing the hypotheses of cultural differences in the context of international distribution channels for Norwegian farmed salmon, only minor cultural differences were detected. This may be due to the fact that the fisheries is a very international industry, and a specific culture within the international fisheries industry may exist.

Adapting to diverse customers: A training matrix for international marketers

Despite the importance and revenue potential of global markets, many companies still fail to train marketers to interact with diverse customers. Too often, international marketers are caught off guard in how to approach and respond to customers of different cultures. This lack of sensitivity can put companies at a competitive disadvantage. The purpose of this paper is to develop a conceptual framework and matrix that incorporate the role of intercultural communication in developing international buyer-seller relationships. The framework focuses on the predispositions and abilities that marketers bring to an intercultural selling encounter and the consequences of these abilities in developing buyer-seller relationships. Implications for developing interculturally adaptive training programs are discussed.