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The Determinants of Local Suppliers’ Trust Towards Foreign Buyers

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Abstract

  • This study examines how local suppliers’ trust towards their foreign buyers is developed in international buyer-supplier cooperation. By identifying cognition- and affect-based trust as two primary dimensions of interfirm trust in international buyer-supplier cooperation, we investigate how the two types of trust are determined by structural and social exchange attributes, and whether the two types of trust are complementary.

  • A survey and analysis of 155 buyer-supplier relationships between Chinese local suppliers and foreign buyers indicates that opening information exchange and institutionalization of cooperation have positive influence on cognition-based trust, while inter-firm diversity exerts a mixed impact on cognition-based trust. In addition, socialized interaction and assistance offered by foreign firms are strongly related to affect-based trust. We also find that Chinese firms’ cognition- and affect-based trust towards their foreign partners are complementary.

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Notes

  1. According to Saxton (1997), performance of cooperation was operationalized with a three-item measure scale: (1) overall, we are very satisfied with the performance of this cooperation, (2) the cooperation has realized the goals we set out to achieve, and (3) the cooperation has contributed to our core competencies and competitive advantage (Cronbach Alpha = 0.64). The independent variables include: cognition-based trust, affect-based trust, the interaction item (the product of standardized cognition- and affect-based trust). Three control variables were selected: Inter-firm diversity in management, inter-firm diversity in technology, and the age of cooperation.

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Acknowledgments

We thank the editors and reviewers for their helpful suggestions, and Yadong Luo for his insightful comments to improve our work. This study was supported by the National Natural Science Foundation of China (70802048) and the New Century Excellent Talent Program (NCET-10-645).

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Authors and Affiliations

  1. School of Management, Xi’an Jiaotong University, Xi’an, Shaanxi province, China

    En Xie &  Yuan Li

  2. Anti College of Economics and Management, Shanghai Jiatong University, Shanghai, China

    Yuan Li

  3. School of business, Nanjing University, Nanjing, Jiangsu province, China

    Zhongfeng Su

  4. School of Computing, National University of Singapore, Singapore, Singapore

    Hock-Hai Teo

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  1. En Xie
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  2. Yuan Li
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Correspondence to En Xie.

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Xie, E., Li, Y., Su, Z. et al. The Determinants of Local Suppliers’ Trust Towards Foreign Buyers. Manag Int Rev 50, 585–611 (2010). https://doi.org/10.1007/s11575-010-0050-3

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