Driving performance in exporter-importer exchange relationships: The efficacy of interorganizational trust as a response to exchange risks

Ahamed, A.F.M. Jalal; Noboa, Fabrizio Article Driving performance in exporter-importer exchange relationships: The efficacy of interorganizational trust as a response to exchange risks Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Ahamed, A.F.M. Jalal; Noboa, Fabrizio (2023) : Driving performance in exporterimporter exchange relationships: The efficacy of interorganizational trust as a response to exchange risks, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 10, Iss. 3, pp. 1-22, https://doi.org/10.1080/23311975.2023.2256953 This Version is available at: https://hdl.handle.net/10419/294625 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=oabm20 Cogent Business & Management ISSN: (Print) (Online) Journal homepage: www.tandfonline.com/journals/oabm20 Driving performance in exporter-importer exchange relationships: The efficacy of interorganizational trust as a response to exchange risks A.F.M. Jalal Ahamed & Fabrizio Noboa To cite this article: A.F.M. Jalal Ahamed & Fabrizio Noboa (2023) Driving performance in exporter-importer exchange relationships: The efficacy of interorganizational trust as a response to exchange risks, Cogent Business & Management, 10:3, 2256953, DOI: 10.1080/23311975.2023.2256953 To link to this article: https://doi.org/10.1080/23311975.2023.2256953 © 2023 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. Published online: 10 Sep 2023. Submit your article to this journal Article views: 493 View related articles View Crossmark data MARKETING | RESEARCH ARTICLE Driving performance in exporter-importer exchange relationships: The efficacy of interorganizational trust as a response to exchange risks A.F.M. Jalal Ahamed 1 * and Fabrizio Noboa 2 Abstract: Drawing on the transaction cost analysis perspective, this study examines how three types of exchange risks influence performance in exporter-importer exchange relationships. These risks include cultural distance, which gives rise to behavioral uncertainty and its associated measurement problem; market turbulence, a dimension of environmental uncertainty that gives rise to an adaptation problem; and transaction-specific assets, representing a safeguarding problem. The conceptual model assesses how an informal governance mechanism, interorganizational trust, responds to these three exchange risks and, in doing so, fosters relational and export performance. Based on a structural equation model conducted in PLS, our findings indicate that cultural distance relates positively to interorganizational trust, and market turbulence positively relates to exporter-specific assets. Exporter-specific assets and inter-organizational trust were found to have a reciprocal relationship. This research also confirms the mediating role of relational performance concerning the effects of exporter-specific assets and interorganizational trust on financial export performance. Subjects: International Marketing; Marketing Management; Relationship Marketing Keywords: cultural distance; behavioral uncertainty; environmental uncertainty; market turbulence; Latin America 1. Introduction Exporters often operate in challenging contexts arising from the higher risks, dynamism, and complexity associated with maintaining international exchange relationships (Bodlaj et al., 2017; Leonidou et al., 2002, 2014). Turbulent export markets are often characterized by rapidly changing buyer preferences, varied buyer demand, and a persistent focus on new market offerings (Srivastava et al., 2015). Turbulent export markets thrust the exporters not only to employ finance but may also leave a long-lasting effect on the bilateral exchange relationships. This dreadful context, coupled with the exporter’s need to operate in a culture significantly different from the home country, has the equally hostile possibility to challenge the exporter-importer relationship eventually, the performance. Ahamed & Noboa, Cogent Business & Management (2023), 10: 2256953 https://doi.org/10.1080/23311975.2023.2256953 Page 1 of 22 Received: 06 July 2022 Accepted: 05 September 2023 *Corresponding author: A.F.M. Jalal Ahamed, School of Business, University of Skövde, Skövde SE-541 28, Sweden E-mail: [email protected] Reviewing editor: Hamida Skandrani, Management, University of Manouba, The Higher Institute of Accounting and Business Administration, Tunisia Additional information is available at the end of the article © 2023 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent. Exporters took myriad strategic responses to mitigate the risks posed by challenging contexts. International distribution networks represent hybrid forms of transaction governance, given that they are relational exchanges that involve multiple transactions that recur over time. Hence, they represent ongoing processes embedded in historical and socio-cultural contexts surrounding the transactions (Dwyer et al., 1987; Granovetter, 1992, 1995; Heide, 1994). For exporters, maintaining long-term relational exchanges with foreign distributors (importers) represents an essential performance and competitive advantage source. Numerous studies have drawn on Transaction Cost Analysis (TCA) (Williamson, 1985, 1991), a theoretical framework that has spawned considerable research across many disciplines, including international business, marketing channels, and strategy. TCA argues that firms make discriminating choices about which governance structure to use to facilitate transactions, given the particular exchange risks that may be present. The choice among governance structures includes markets (through competition among current and potential exchange partners), the firm (i.e., full vertical integration), and hybrid or intermediate forms (i.e., ongoing exchange relationships in which specific governance mechanisms can be crafted). Further, a related framework of relational exchange theory (RET) (Dwyer et al., 1987; Gilliland & Bello, 2002; Macneil, 1980; Morgan & Hunt, 1994) has been widely used, wherein researchers have proposed an array of relational variables as governance mechanisms to manage the conditions that may arise in ongoing exchange relationships, whether domestic or international (Bloemer et al., 2013; Styles & Ambler, 2000; Styles et al., 2008). Trust is a relational variable prevalent in many international marketing, marketing channels, and exporting studies. It is a construct that has come to be recognized as an informal governance mechanism in interfirm relationships (Ahamed et al., 2015; Heide & John, 1990; Kautonen, 2006; Skarmeas et al., 2008; Wang et al., 2019) as well as it is potential to foster favorable strategic and financial outcomes (Ashnai et al., 2016; Zaheer et al., 1998). Despite having a rich research tradition of both theoretical streams, several significant research gaps persist. One is that the process by which the cultural context and market turbulence may influence trust and deployment of specific asset investments and, ultimately, financial, relational, and/or strategic performance outcomes have not been fully explicated. Another is the equivocal nature of the relationship of cultural distance with trust and market turbulence with specific asset investments. Still, another is that few studies have provided consistent empirical evidence that relationship performance functions as an antecedent of export performance (O’Toole & Donaldson, 2002). Responding to these gaps, we constructed an integrated model of “context-strategic response-performance” that shows how exchange risk context can affect trust and investment in specific assets, as well as their ability to manage exchange risks and enhance performance. In particular, we examine the role of perceived cultural distance and market turbulence relative to inter-organizational trust and exporter-specific assets and two dimensions of performance, i.e., relational performance and financial export performance. Furthermore, this study took place in a rarely studied national context, i.e., a developing nation. Many of the empirical studies found in the exporter-importer, international business, and marketing channels literature have been conducted in countries representing highly developed economies and are especially skewed toward Europe, Asia, and North America (Aykol & Leonidou, 2018; Bianchi & Saleh, 2011; Samiee & Chirapanda, 2019; Tesfom et al., 2004). We test our proposed model with data from exporters located in the Latin American country of Ecuador, a research setting where limited little empirical evidence has been generated (Fastoso & Whitelock, 2011). In the next section, we present our model, its embedded hypotheses, and the theoretical rationale for each. Following that, we summarize our data collection methods, operational measures, and methods used to evaluate data quality. Next are the results of our substantive analysis. Ahamed & Noboa, Cogent Business & Management (2023), 10: 2256953 https://doi.org/10.1080/23311975.2023.2256953 Page 2 of 22 We conclude by discussing our findings, theoretical and managerial implications, limitations, and directions for future research. 2. Theory and hypothesis development 2.1. Perceived cultural distance Foreignness-induced problems are issues that firms face when entering foreign markets (Obadia, 2013). Zaheer and Venkatraman (1995, p. 341) asserts that foreignness issues result from the “unfamiliarity of the [foreign] environment, from cultural, political and economic differences and the need for coordination across geographic distance.” Research on foreignness and cultural issues in international business studies has yielded inconsistent results (Papadopoulos et al., 2011; Zanger et al., 2008). Culture refers to transmitted patterns of values, ideas, and other symbolic systems that distinguish the members of one group or category of people from another and shape individual members’ beliefs, assumptions, expectations, attitudes, and behaviors (Hofstede, 1991; Kroeber & Kluckhohn, 1952). Thus, the perceptions and behaviors of export-import exchange partners will likely vary according to their respective national, industry, and organizational cultures and prior experience with firms from other countries. In studies of foreignness that use psychic or cultural distance constructs, the terms often appear interchangeably (Sousa & Bradley, 2006), creating conceptual confusion and inconsistencies. More precisely, psychic distance, also known as perceived cultural distance, is a managerial perception that comprises the sum of differences between the home and foreign markets in terms of “culture, language, legal and economic systems, business practices, and other country-level factors” (Katsikeas et al., 2009, p. 138). Although some studies apply psychic distance as a national-level phenomenon, individual or organizational-level analyses are more appropriate because these perceptions constitute the subjective interpretations of the reality of key informants. Hence, psychic distance does not influence each person or organization similarly (Sousa & Bradley, 2006). Psychic distance can also impede export-import relationship performance because these dyads often lack common cultural values, social norms, and business practices, leading to communication difficulties, misunderstandings, incomplete contracts, and increased transaction costs (Ahamed & Skallerud, 2013; Dow & Ferencikova, 2010; Karunaratna et al., 2001; Luo, 2002; North et al., 2017; Park et al., 2018; Simonin, 1999). How cultural distance influences export performance and the underlying processes remain poorly understood. Reflecting what has become known as the paradox of cultural distance, a growing number of studies provide evidence that greater cultural distance enhances performance (Chakrabarti et al., 2009; Evans & Mavondo, 2002; Hu & Chen, 1996; Morosini et al., 1998; O’Grady & Lane, 1996; Park et al., 2018). Similarly, Lui et al. (2006) posit that trust may partially or fully mediate cultural distance’s influence on performance. Moreover, conflicting views exist about the direct effect of cultural distance (or theoretically similar constructs) on trust i.e., some researchers (e.g., Obadia, 2013) have depicted it as a negative antecedent, whereas others (e.g., Zhang et al., 2003) predict a positive impact of cultural distance on trust. Reflecting the perspective of TCA theory, cultural distance can be construed as a factor that gives rise to behavioral uncertainty (Azar & Drogendijk, 2016), which can evoke monitoring or performance evaluation problems (John & Reve, 2010; Rindfleisch & Heide, 1997). On the one hand, the lack of shared cultural values, social norms, and business practices may impede communication, so cultural distance will impede an exporter’s ability to monitor its partner. On the other hand, despite potential monitoring difficulties, the cultural distance could motivate exporters to develop closer relationships with their exchange partners, reflected in pledges to signal a desire for continuity. In close exchange relationships marked by greater trust, information sharing, collaborative efforts, joint decision-making, and greater reliance on self-monitoring by exchange partners become more feasible (Bhatti et al., 2020). Ahamed & Noboa, Cogent Business & Management (2023), 10: 2256953 https://doi.org/10.1080/23311975.2023.2256953 Page 3 of 22 2.2. Market turbulence Environmental uncertainty is an exogenous factor vital in inter-organizational relationships and outcomes (Palmatier et al., 2007). It has been conceptualized as “the difficulties in effectively planning for future conditions concerning international buyer-seller operations, caused by both the diversity (i.e., the existence of multiple external factors which need to be considered when making decisions) and dynamism (i.e., changes in the external factors over time) associated with the external environment” (Leonidou et al., 2006, p. 578). According to the TCA perspective, environmental uncertainty gives rise to an adaptation problem, such that contingencies might not be foreseen, making them difficult to address contractually at the outset of a transaction. Appropriate responses may become apparent only as events transpire (John & Reve, 2010; Rindfleisch & Heide, 1997). This situation provides firms with a powerful motivation to seek flexibility, as might be achieved through relational exchange mechanisms. Several studies provide empirical evidence of the positive influences of relational variables (e.g., commitment, trust, interdependence, relational norms) on relational exchange outcomes in conditions of high uncertainty (Cannon et al., 2000; Palmatier et al., 2007). In particular, environmental uncertainty may manifest in the form of market turbulence, which is a function of market volatility and heterogeneity and captures the extent to which markets are fragmented, as well as the frequency with which customers’ preferences and compositions change (Kohli & Jaworski, 1990; Srivastava et al., 2015). When market turbulence is greater, firms cannot accurately monitor and respond to market demand, or forecast market trends accurately. Consequently, it motivates them to seek more environmental information (Mason & Staude, 2009). One way for exporters to do so is to draw closer to an importer exchange partner to benefit from its market knowledge and environmental scanning efforts. 2.3. Transaction specific assets When one party commits to specific investments dedicated to a particular exchange partner, transaction-specific assets (specialized or dedicated investments) are created (Heide & John, 1990; Williamson, 1985). For example, an exporter may tailor its end product, manufacturing line and/or logistics processes to deal with a particular importer and the market it serves. While such investments are usually made intentionally because of their productive nature, exporters may use them to gain better terms or more effective marketing efforts from importers, as such specialized assets can also be viewed as a pledge or bond that signals commitment (Rindfleisch & Heide, 1997; Stump & Joshi, 1999; Williamson, 1985). The essence of specific investments is that they represent both switching costs (Porter, 1980) and a hold-up potential. At the onset of an exchange relationship with a particular importer, the exporter may have multiple importers who are viable alternatives for one another. However, once specific investments have been committed, the buying situation becomes fundamentally transformed (Williamson, 1985), i.e., the exporter’s ability to turn to other importers is effectively curtailed for the duration of that transaction. Consequently, specific investments create a safeguarding problem (Heide & John, 1990) since they evoke a need to protect their value from opportunistic appropriation by the importer to whom they are dedicated. This is because specific investments cannot be costlessly or easily be redeployed for use with another exchange partner without their value becoming severely reduced should the transaction be terminated prematurely (Williamson, 1985). A contractual (formal) or organizational (bureaucratic and/or relational) safeguarding mechanism can sometimes be incorporated into ongoing exchange relationships by exporters (Wathne & Heide, 2000; Williamson, 1985). Such mechanisms provide a means to impose social control (Vanneste, 2016) by inhibiting opportunistic behaviors and/or promoting pro-social behaviors and the continuance of the exchange relationship. 2.4. Trust Trust has long been a topic of interest across many disciplines, including economics, marketing, organizational behavior, strategic management, and international business studies (Bodlaj et al., Ahamed & Noboa, Cogent Business & Management (2023), 10: 2256953 https://doi.org/10.1080/23311975.2023.2256953 Page 4 of 22 2017; Luo, 2002; Mayer et al., 1995; Zhong et al., 2017). Trust is among the most researched constructs in the export marketing literature (Bloemer et al., 2013). Critics argue that the theory of trust is still developing (e.g., Seppänen et al., 2007) and that this construct has been vaguely measured (Ellis & Shockley-Zalabak, 2001). A recent literature review revealed more than 40 conceptualizations of trust (Bodlaj et al., 2017), particularly concerning its definition, dimensionality, and direction. Because the trust construct draws on multiple theories from various disciplines, it has been conceptualized and operationalized in divergent ways, leading to mixed findings and limited explanatory power (Bodlaj et al., 2017; Ganesan & Hess, 1997; Zhong et al., 2017). Several researchers assume that a concise and universally accepted definition does not yet exist (Mayer et al., 1995,; Zhong et al., 2017). Although several conceptualizations of the multidimensional nature of trust exist, the trust construct is often operationalized as a more abstract, unidimensional phenomenon (Ganesan & Hess, 1997; Moorman et al., 1992; Rempel et al., 1985). Trust, too, has been conceptualized as a bidirectional phenomenon (i.e., both partners must trust and be trusted to engage in mutually beneficial exchanges), yet it typically is conceptualized and measured as a unidirectional phenomenon (Bodlaj et al., 2017; Korsgaard et al., 2015). Despite these many conceptualizations, the trust literature tends to agree on several key aspects: vulnerability, reliance on another, and confidence that the vulnerability will not be exploited (Mayer et al., 1995; Morgan & Hunt, 1994; Sabel, 1993). To build trust, channel members and end users must be confident that the other party will not exploit their vulnerabilities; furthermore, it facilitates cooperative behaviors that are crucial for inter-organizational communication (Bloemer et al., 2013; Doney & Cannon, 1997; Dyer & Chu, 2000; Ganesan & Hess, 1997; Morgan & Hunt, 1994; Zhong et al., 2017). At the outset of an exchange relationship, trust takes on more of a calculative nature based on qualification efforts that assess the proposed partner’s capabilities and motivation to perform (Stump & Heide, 1996) and the expected future benefits and costs of transacting (Poppo et al., 2016). Thereafter, the development of trust entails a learning process, usually through interactions that enable partners to learn about each other’s trustworthiness and the value of trusting (Bodlaj et al., 2017). In effect, trust is a function of both the past behaviors of the exchange partners and their expectations of the future. Partners in a trusting relationship likely sense betrayal if the counterpart’s behaviors or performance fail to meet expectations (Ashnai et al., 2016; Zaheer et al., 1998). Thus, trust is central to all exchange relationships and represents one of the core dimensions of relationship quality (Leonidou et al., 2006, 2014; Morgan & Hunt, 1994; Styles et al., 2008). Besides focusing on the conceptual nature of trust, the extant literature also encompasses this construct’s antecedents and consequences (Lui et al., 2006). In this study, we focus on the inter-organizational dimension of trust (Zaheer et al., 1998), which they define as “ . . . the extent to which there is a collectively-held trust orientation by organizational members toward the partner firm” (p. 143). 2.5. Export performance A plethora of indicators exist to measure export performance (Zou & Stan, 1998). In a recent review, Chen et al. (2016) found export performance operationalized in 53 different ways, with nearly half of these measures used only once or twice. Economic measures appear to dominate all available measures of export performance. Despite the glut of operational measures, several comprehensive export performance measurement frameworks have been proposed, albeit with varying dimensions and categories and associated limitations (Carneiro et al., 2007). For example, the widely cited EXPERF scale (Zou & Stan, 1998) incorporates three dimensions: financial export performance (export profits, export sales, and export sales growth), strategic export performance (contribution of the export venture to the firm’s competitiveness, strategic position, and market share), and satisfaction with export performance (perceived success of the venture, satisfaction with the venture, and degree to which the venture meets expectations). Katsikeas et al. (2000) distinguish economic (i.e., sales-, profit-, and market share-related), non-economic (i.e., product- and market-related and miscellaneous), and generic measures of export performance. Sousa’s (2004) categorization of export performance measures consists of sales, profit, market-related, general, and miscellaneous indicators. However, these measures have rarely included relationship performance, despite calls to include it as an indicator of export performance (e.g., O’Toole & Donaldson, 2002). Ahamed & Noboa, Cogent Business & Management (2023), 10: 2256953 https://doi.org/10.1080/23311975.2023.2256953 Page 5 of 22 Relationship performance stems from a specific set of non-financial export performance measures that seek to assess inter-organizational relational dynamics attributed to a focal exchange partner (e.g., level of efficiency, productivity, contribution toward achieving financial goals) (Luo et al., 2015; O’Toole & Donaldson, 2002). Relationship performance can be defined as the perceived economic performance of a particular dyad within a broader network of exchange relationships as compared to expectations (Medlin, 2003). This can significantly impact on sales growth, market position, marketing support, or qualified services. By leveraging a partner’s capabilities and resources, successful inter-organizational relationships can enhance firms’ financial performance. 2.6. Relationships among perceived cultural distance, market turbulence, exporter specific assets, and interorganizational trust Perceived cultural distance is a generalized managerial perception that tends to be based on stereotypes, anecdotes, cultural norms, socialization, or media reports, more so than on first-hand experience—unlike an inter-organizational trust, which is largely based on experience and specific to the exchange relationship. The influence of national culture on individual and organizational behavior is well documented in the international marketing literature, as are its implications for trust development and efficacy (Atuahene-Gima & Li, 2002). Because perceived cultural distance can hinder information flows among the trading parties, limit the effectiveness of contracts (Karunaratna et al., 2001), and hinder the development and maintenance of trust (Obadia, 2013). A study by Nes et al. (2007) found that cultural distance had a significant adverse effect on trust. Hence, we propose the following: H1: Perceived cultural distance will have a negative effect on inter-organizational trust. We leverage TCA’s conceptual argument that market turbulence represents an adaptation problem (John & Reve, 2010; Rindfleisch & Heide, 1997), which can be mitigated by shifting toward relational exchange postures. On the one hand, market turbulence could inhibit specific assets since it could be a factor that may lead to the premature termination of an exchange relationship and thus would heighten the risk that the value of specific asset investments will be extinguished. Hence, a negative relationship can be expected. We propose the following hypotheses: H2: Market turbulence will have a negative effect on exporter-specific assets. 2.7. Relationship between exporter-specific assets and inter-organizational trust Drawing on the logic of TCA, market governance is precluded when a safeguarding problem exists. When specific assets are tendered in an ongoing relationship, we can expect that firms will install governance mechanism(s) in ongoing exchange relationships to protect their interests. Several remedies are possible, reflecting market-like mechanisms, such as contracts or hostages (e.g., reciprocal specialized investments), bureaucratic mechanisms (such as monitoring or decision control), or relational mechanisms (such as trust, commitment, and relational norms) (Wathne & Heide, 2000; Williamson, 1985). At the beginning of an exchange relationship, initial perceptions of reliability and fidelity can be attributed to the reputation of the prospective exchange partner (for example, an importer), recommendations, and the qualifications conducted before selecting the firm (Stump & Heide, 1996). Such efforts can provide the confidence to tender specific assets as an inducement, pledge, or signal commitment to an ongoing exchange relationship. Another view holds that inter-organizational trust develops from rational and pragmatic considerations of interfirm adaptations (e.g., specific assets) and inter-organizational learning, as well as other historical aspects of inter-organizational relationships, such as previous transactions, negotiations, or conflicts (Ashnai et al., 2016; Dwyer et al., 1987; Ford, 1980). Thus, the interrelationship between exporter-specific assets and inter-organizational trust can be expected to be reciprocal over time. As such, higher levels of inter-organizational trust can represent confidence about the lack of opportunistic intent by the importer, which can lead to relationship-enhancing behaviors, such as the growth of specific asset investments as the exchange relationship persists. Reflecting our Ahamed & Noboa, Cogent Business & Management (2023), 10: 2256953 https://doi.org/10.1080/23311975.2023.2256953 Page 6 of 22 expectation of mutual influence, this leads us to propose: there will be a reciprocal positive effect between exporter-specific assets and inter-organizational trust. More specifically, H3 (a): Exporter-specific assets are positively related to the inter-organizational trust. H3 (b) Interorganizational trust is positively related to exporter-specific assets. 2.8. Relationships among interorganizational trust, exporter specific assets and performance Although trust should generally foster performance, Katsikeas et al. (2009) contend that its relationship with performance is complex and poorly understood. Medlin (2003), argues that perceived economic performance accrues from the efforts of jointly acting relationship parties. Trusting relationships are expected to positively affect performance by promoting productive behaviors, thus increasing the efficiency and economic production potential of firms that engage in such exchanges (Luo et al., 2015; Obadia & Vida, 2011). In general, trust allows individuals or organizations to accept their vulnerability to others and to make riskier decisions that could lead to superior outcomes (Mayer et al., 1995). Trust is generally thought to improve performance because it facilitates critical and sufficient information flows, lowers transaction costs, improves capabilities, and increases strategic flexibility, all of which are not possible in arms-length exchanges (Katsikeas et al., 2009; Luo, 2002). Despite this conceptual consensus, empirical evidence is divided. For example, Zhang et al. (2003) and Katsikeas et al. (2009) find a positive trust—financial performance relationship, but Aulakh et al. (1996) report an insignificant direct effect. Solberg (2006) and Barnes et al. (2015)) provide evidence that the effect of interfirm trust on financial performance is mediated by interfirm relationship quality, which parallels the notion of relationship performance. A recent meta-analysis by Leonidou et al. (2014) reveals that trust relates positively only to relationship performance, not financial performance. In light of these many arguments and prior findings, we propose the following hypotheses: H4 (a): Interorganizational trust is positively related to relationship performance H4 (b): Interorganizational trust is positively related to financial export performance. H5: Relationship performance is positively related to financial export performance. Exporter-specific investments can also be expected to influence both relational performance and financial performance. Such investments are tangible evidence of commitment to the importer and the desire for continuity. They thus can serve as the basis for relationship-building efforts and pro-social behaviors on both sides of the dyad (Morgan & Hunt, 1994). Furthermore, such investments are thought to be more productive than generalized investments (Stump & Joshi, 1999). Thus, we propose these final hypotheses: H6 (a): Exporter-specific assets are positively related to relationship performance. H6 (b): Exporter-specific assets are positively related to financial export performance. 3. Methodology 3.1. Sample and data collection procedures Our sampling frame was the listed non-oil exporters published by the Ministerio de Comercio Exterior (Ecuadorian Ministry of Foreign Trade). Recent criticisms that export-import studies have been conducted mainly in North America, Europe, and Asia influenced our choice of Ecuador as our country context, along with calls for more research involving firms from developing nations (Aykol & Leonidou, 2018; Samiee & Chirapanda, 2019) and Latin American firms in particular (Bianchi & Saleh, 2020; Fastoso & Whitelock, 2011; Paul & Mas, 2020). Our data collection procedures Ahamed & Noboa, Cogent Business & Management (2023), 10: 2256953 https://doi.org/10.1080/23311975.2023.2256953 Page 7 of 22 performance (Styles et al., 2008). Relationship performance was found to have a positive and significant effect on export financial performance, which indicates support for H5. Relationship performance captures the inter-organizational relational dynamics attributed to a focal importer, such that successful inter-organizational relationships will also enhance the exporter’s financial performance through more collaborative efforts and effective leverage of the importer’s capabilities and resources (Luo et al., 2015; Medlin, 2003; O’Toole & Donaldson, 2002). While both interorganizational trust and exporter-specific assets were expected to positively influence export financial performance (H4(b) & H6(b), respectively), neither was supported, which suggests that the influence of inter-organizational trust on financial export performance is fully mediated by relationship performance, which is consistent with the meta-analysis by Leonidou et al. (2014). 6. Implications, limitations, and future research directions 6.1. Theoretical contribution Despite calls for investigations of channel environments going back decades (e.g., Achrol & Stern, 1988), empirical evidence remains limited, especially from the context of developing nations, and often contradictory. In dynamic international business environments, it is imperative that we expand our knowledge of how companies from different parts of the world respond to exchange risks caused by geographical or cultural distances, turmoil due to changing consumer trends, global economic conditions, and even extraordinary events such as the COVID-19 pandemic. Organization theory predicts that how firms respond to their operating environment is crucial for their performance (Perrow, 1970). With this research, we have taken a distinct conceptualization inspired by transaction cost analysis theory and focused on three factors (perceived cultural distance, market turbulence, and exporter-specific assets) that embody three different types of exchange risks that exist in international marketing and the manner by which relationship and financial export performance are influenced through the informal, relational governance mechanism of inter-organizational trust. From a theoretical perspective, this study contributes to the extant literature in several ways. One is that we provide new empirical evidence that perceived cultural distance affects inter-organizational trust positively, which gives further credence to the view that this construct has implications for trust development and efficacy (Atuahene-Gima & Li, 2002). Rather than being a limiting factor, as indicated by Obadia (2013), the positive relationship found in this study suggests it may motivate exporters to draw closer to their importer exchange partners. Conceivably, when the exporter operates from a developing nation, it may be easier to deal with a foreign intermediary and rely more on relational exchange mechanisms than distributors operating in its home market. We also provide added clarity about how market turbulence influences exporter-specific asset investments, this contribution might be more relevant analyzing exporter-importer relationships during a global economic downturn. Given the positive effect of market turbulence on exporter-specific assets, the logic of relational exchange theory again appears to prevail over that of transaction cost analysis. 6.2. Managerial implications This research also offers implications for managers and policymakers, especially in less developed countries. Our results suggest that despite the vulnerability of these dedicated investments, exporters are committing transaction-specific assets as a signal of their desire for continuity and a bilateral approach to their exchange relationships. When forward integration is not possible, maintaining ongoing exchange relationships with importers can be an effective strategy to penetrate foreign markets. By establishing an ongoing exchange relationship with importers, exporters can access foreign markets and gain additional knowledge, skills, and resources, expanding revenues and profits (Riddle & Gillespie, 2003). 6.3. Limitations and direction for future research We acknowledge the several limitations of this study and suggest some aspects that future research could address. One is that we focused on a single informal, relational governance mechanism, while future studies could incorporate a broader range of market-like, bureaucratic, and relational Ahamed & Noboa, Cogent Business & Management (2023), 10: 2256953 https://doi.org/10.1080/23311975.2023.2256953 Page 14 of 22 governance mechanisms that can be crafted into ongoing exchange relationships between exporters and importers that represent hybrid governance forms. Another is that we collected data from exporting members of exchange dyads, so we lack insights into the importers’ perspective. Researchers could conduct more intensive data collection efforts by including variables representing the perspectives of both exporters and importers using either a single key informant or informants from both sides of the dyad. Still another limitation is our limited ability to generalize from the findings of this study, given that we only collected data from a single country. We also recognize the limitations of employing a cross-sectional design. Thus, while we presented plausible and logical sequences to the variables, we cannot establish causality with certainty. Future research could employ longitudinal data to support time-series analyses that can provide more insights. Future research could also explore the effects of the variables being better represented in a contingent manner. For example, is the relationship between perceived cultural distance and inter-organizational trust the same when the exporter and importer are both operating from developed nations versus when the exporter is from a developing nation? Or, what if the importer is from a developed nation. Another consideration for future studies is whether the performance effects of inter-organizational trust or exporter-specific assets are moderated by cultural distance and/or market turbulence. In conclusion, despite some limitations this study contributes to the transaction cost analysis and export marketing literature by providing new insights into how exchange risks are managed through the relational governance mechanism of inter-organizational trust and its efficacy in promoting relationships and financial export performance. Author details A.F.M. Jalal Ahamed 1 E-mail: [email protected] Fabrizio Noboa 2 1 School of Business, University of Skövde, Skövde, Sweden. 2 USFQ Business School, Universidad San Francisco de Quito (USFQ), Quito, Ecuador. Disclosure statement No potential conflict of interest was reported by the author(s). Citation information Cite this article as: Driving performance in exporter-importer exchange relationships: The efficacy of interorganizational trust as a response to exchange risks, A.F.M. Jalal Ahamed & Fabrizio Noboa, Cogent Business & Management (2023), 10: 2256953. Notes 1. Response rated based on the qualified contacts. 2. Identical beta-coefficient and p-value were found for both Model A and Model B for path coefficients related to H4-a&b, H5, and H6-a&b. References Achrol, R. S., & Stern, L. W. (1988). Environmental determinants of decision-making uncertainty in marketing channels. Journal of Marketing Research, 25(1), 36–50. https://doi.org/10.1177/ 002224378802500104 Ahamed, A. J., & Skallerud, K. (2013). Effect of distance and communication climate on export performance: The mediating role of relationship quality. Journal of Global Marketing, 26(5), 284–300. https://doi.org/10. 1080/08911762.2013.830170 Ahamed, A. J., Stump, R. L., & Skallerud, K. (2015). The mediating effect of relationship quality on the transaction cost–export performance link: Bangladeshi exporters’ perspectives. Journal of Relationship Marketing, 14(2), 152–169. https://doi. org/10.1080/15332667.2015.1042345 Anderson, J. C., & Gerbing, D. W. (1988). Structural equation modeling in practice: A review and recommended two-step approach. Psychological Bulletin, 103(3), 411–423. https://doi.org/10.1037/ 0033-2909.103.3.411 Armstrong, J. S., & Overton, T. S. (1977). Estimating nonresponse bias in mail surveys. Journal of Marketing Research, 14(3), 396–402. https://doi.org/10.1177/ 002224377701400320 Ashnai, B., Henneberg, S. C., Naudé, P., & Francescucci, A. (2016). Inter-personal and inter-organizational trust in business relationships: An attitude–behavior–outcome model. Industrial Marketing Management, 52, 128–139. https://doi.org/10.1016/j.indmarman.2015. 05.020 Atuahene-Gima, K., & Li, H. (2002). When does trust matter? Antecedents and contingent effects of supervisee trust on performance in selling new products in China and the United States. Journal of Marketing, 66(3), 61–81. https://doi.org/10.1509/ jmkg.66.3.61.18501 Aulakh, P. S., Kotabe, M., & Sahay, A. (1996). Trust and performance in cross-border marketing partnerships: A behavioral approach. Journal of International Business Studies, 27(5), 1005–1032. https://doi.org/ 10.1057/palgrave.jibs.8490161 Aykol, B., & Leonidou, L. C. (2018). Exporter-importer business relationships: Past empirical research and future directions. International Business Review, 27 (5), 1007–1021. https://doi.org/10.1016/j.ibusrev. 2018.03.001 Azar, G., & Drogendijk, R. (2016). Cultural distance, innovation and export performance: An examination of perceived and objective cultural distance. European Business Review, 28(2), 176–207. https://doi.org/10. 1108/EBR-06-2015-0065 Barnes, B. R., Leonidou, L. C., Siu, N. Y., & Leonidou, C. N. (2015). Interpersonal factors as drivers of quality and performance in Western–Hong Kong interorganizational business relationships. Journal of International Marketing, 23(1), 23–49. https://doi.org/10.1509/jim. 14.0008 Baruch, Y., & Holtom, B. C. (2008). Survey response rate levels and trends in organizational research. Human Relations, 61(8), 1139–1160. https://doi.org/10.1177/ 0018726708094863 Ahamed & Noboa, Cogent Business & Management (2023), 10: 2256953 https://doi.org/10.1080/23311975.2023.2256953 Page 15 of 22 Bhatti, W. A., Larimo, J., & Servais, P. (2020). Relationship learning: A conduit for internationalization. International Business Review, 29(3), 101694. https:// doi.org/10.1016/j.ibusrev.2020.101694 Bianchi, C. C., & Saleh, M. A. (2011). Antecedents of importer relationship performance in Latin America. Journal of Business Research, 64(3), 258–265. https:// doi.org/10.1016/j.jbusres.2009.11.010 Bianchi, C., & Saleh, M. A. (2020). Investigating SME importer–foreign supplier relationship trust and commitment. Journal of Business Research, 119, 572–584. https://doi.org/10.1016/j.jbusres.2020.07.023 Bloemer, J., Pluymaekers, M., & Odekerken, A. (2013). Trust and affective commitment as energizing forces for export performance. International Business Review, 22(2), 363–380. https://doi.org/10.1016/j. ibusrev.2012.05.002 Bodlaj, M., Povše, H., & Vida, I. (2017). Cross-border relational exchange in SMEs: The impact of flexibility-based trust on export performance. Journal of East European Management Studies, 22(2), 199–220. https://doi.org/ 10.5771/0949-6181-2017-2-199 Cannon, J. P., Achrol, R. S., & Gundlach, G. T. (2000). Contracts, norms, and plural form governance. Journal of the Academy of Marketing Science, 28(2), 180–194. https://doi.org/10.1177/ 0092070300282001 Carneiro, J., Rocha, A. D., & Silva, J. F. D. (2007). A critical analysis of measurement models of export performance. BAR-Brazilian Administration Review, 4 (2), 1–19. https://doi.org/10.1590/S1807- 76922007000200002 Chakrabarti, R., Gupta-Mukherjee, S., & Jayaraman, N. (2009). Mars–Venus marriages: Culture and crossborder M&A. Journal of International Business Studies, 40(2), 216–236. https://doi.org/10.1057/jibs.2008.58 Chen, J., Sousa, C. M., & He, X. (2016). The determinants of export performance: A review of the literature 2006-2014. International Marketing Review, 33(5), 626–670. https://doi.org/10.1108/IMR-10-2015-0212 Chin, W. W. (2010). How to write up and report PLS analyses. In Handbook of partial least squares (pp. 655–690). Springer Berlin Heidelberg. https://doi.org/ 10.1007/978-3-540-32827-8_29 Doney, P. M., & Cannon, J. P. (1997). An examination of the nature of trust in buyer-seller relationships. Journal of Marketing, 61(2), 35–51. https://doi.org/10. 1177/002224299706100203 Dow, D., & Ferencikova, S. (2010). More than just national cultural distance: Testing new distance scales on FDI in Slovakia. International Business Review, 19(1), 46–58. https://doi.org/10.1016/j.ibusrev.2009.11.001 Dwyer, F. R., Schurr, P. H., & Oh, S. (1987). Developing buyer-seller relationships. Journal of Marketing, 51(2), 11–27. https://doi.org/10.1177/ 002224298705100202 Dyer, J. H., & Chu, W. (2000). The determinants of trust in supplier-automaker relationships in the US, Japan and Korea. Journal of International Business Studies, 31(2), 259–285. https://doi.org/10.1057/palgrave.jibs.8490905 Ellis, K., & Shockley-Zalabak, P. (2001). Trust in top management and immediate supervisor: The relationship to satisfaction, perceived organizational effectiveness, and information receiving. Communication Quarterly, 49(4), 382–398. https://doi.org/10.1080/ 01463370109385637 Evans, J., & Mavondo, F. T. (2002). Psychic distance and organizational performance: An empirical examination of international retailing operations. Journal of International Business Studies, 33(3), 515–532. https://doi.org/10.1057/palgrave.jibs.8491029 Fastoso, F., & Whitelock, J. (2011). Why is so little marketing research on Latin America published in high quality journals and what can we do about it? International Marketing Review, 28(4), 435–449. https://doi.org/10.1108/02651331111149967 Ford, D. (1980). The development of buyer-seller relationships in industrial markets. European Journal of Marketing, 14(5/6), 339–353. https://doi.org/10.1108/ EUM0000000004910 Fornell, C., & Larcker, D. F. (1981). Structural equation models with unobservable variables and measurement error: Algebra and statistics. In: Sage Publications Sage CA. Ganesan, S., & Hess, R. (1997). Dimensions and levels of trust: Implications for commitment to a relationship. Marketing Letters, 8(4), 439–448. https://doi.org/10. 1023/A:1007955514781 Gilliland, D. I., & Bello, D. C. (2002). Two sides to attitudinal commitment: The effect of calculative and loyalty commitment on enforcement mechanisms in distribution channels. Journal of the Academy of Marketing Science, 30(1), 24–43. https://doi.org/10.1177/ 03079450094306 Granovetter, M. (1992). Economic institutions as social constructions: A framework for analysis. Acta Sociologica, 35(1), 3–11. https://doi.org/10.1177/ 000169939203500101 Granovetter, M. (1995). Coase revisited: Business groups in the modern economy. Industrial and Corporate Change, 4(1), 93–130. https://doi.org/10.1093/icc/4.1.93 Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2009). Multivariate data analysis: A global perspective (7th ed.). Prentice Hall. Hair, J. F., Jr., Sarstedt, M., Hopkins, L., & Kuppelwieser, V. G. (2014). Partial least squares structural equation modeling (PLS-SEM): An emerging tool in business research. European Business Review, 26(2), 106–121. https://doi.org/10.1108/EBR- 10-2013-0128 Ha, J., Karande, K., & Singhapakdi, A. (2004). Importers’ relationships with exporters: Does culture matter? International Marketing Review, 21(4/5), 447–461. https://doi.org/10.1108/02651330410547135 Heide, J. B. (1994). Interorganizational governance in marketing channels. Journal of Marketing, 58(1), 71–85. https://doi.org/10.1177/ 002224299405800106 Heide, J. B., & John, G. (1990). Alliances in industrial purchasing: The determinants of joint action in buyer-supplier relationships. Journal of Marketing Research, 27(1), 24–36. https://doi.org/10.1177/ 002224379002700103 Heide, J. B., & Stump, R. L. (1995). Performance implications of buyer-supplier relationships in industrial markets: A transaction cost explanation. Journal of Business Research, 32(1), 57–66. https://doi.org/10. 1016/0148-2963(94)00010-C Henseler, J., Hubona, G., & Ray, P. A. (2016). Using PLS path modeling in new technology research: Updated guidelines. Industrial Management & Data Systems, 116 (1), 2–20. https://doi.org/10.1108/IMDS-09-2015-0382 Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43 (1), 115–135. https://doi.org/10.1007/s11747-014- 0403-8 Henseler, J., & Sarstedt, M. (2013). Goodness-of-fit indices for partial least squares path modeling. Computational Statistics, 28(2), 565–580. https://doi. org/10.1007/s00180-012-0317-1 Ahamed & Noboa, Cogent Business & Management (2023), 10: 2256953 https://doi.org/10.1080/23311975.2023.2256953 Page 16 of 22 Hofstede, G. (1991). Management in a multicultural society. Malaysian Management Review, 26(1), 3–12. Hu, L. T., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural Equation Modeling: A Multidisciplinary Journal, 6(1), 1–55. https://doi.org/10.1080/ 10705519909540118 Hu, M. Y., & Chen, H. (1996). An empirical analysis of factors explaining foreign joint venture performance in China. Journal of Business Research, 35(2), 165–173. https://doi.org/10.1016/0148-2963(95) 00087-9 Huo, B., Ye, Y., Zhao, X., Wei, J., & Hua, Z. (2018). Environmental uncertainty, specific assets, and opportunism in 3PL relationships: A transaction cost economics perspective. International Journal of Production Economics, 203, 154–163. https://doi.org/ 10.1016/j.ijpe.2018.01.031 Jaworski, B. J., & Kohli, A. K. (1993). Market orientation: Antecedents and consequences. Journal of Marketing, 57(3), 53–70. https://doi.org/10.1177/ 002224299305700304 John, G., & Reve, T. (1982). The reliability and validity of key informant data from dyadic relationships in marketing channels. Journal of Marketing Research, 19(4), 517–524. https://doi.org/10.1177/ 002224378201900412 John, G., & Reve, T. (2010). Transaction cost analysis in marketing: Looking back, moving forward. Journal of Retailing, 86(3), 248–256. https://doi.org/10.1016/j. jretai.2010.07.012 Joshi, A. W., & Stump, R. L. (1999). The contingent effect of specific asset investments on joint action in manufacturer-supplier relationships: An empirical test of the moderating role of reciprocal asset investments, uncertainty, and trust. Journal of the Academy of Marketing Science, 27, 291–305. https://doi.org/10. 1177/0092070399273001 Karunaratna, A. R., Johnson, L. W., & Rao, C. (2001). The exporter-import agent contract and the influence of cultural dimensions. Journal of Marketing Management, 17(1–2), 137–159. https://doi.org/10. 1362/0267257012571492 Katsikeas, C. S., Leonidou, L. C., & Morgan, N. A. (2000). Firm-level export performance assessment: Review, evaluation, and development. Journal of the Academy of Marketing Science, 28(4), 493–511. https://doi.org/10.1177/0092070300284003 Katsikeas, C. S., Skarmeas, D., & Bello, D. C. (2009). Developing successful trust-based international exchange relationships. Journal of International Business Studies, 40(1), 132–155. https://doi.org/10. 1057/palgrave.jibs.8400401 Kautonen, T. (2006). Trust as a governance mechanism in inter-firm relations—conceptual considerations. Evolutionary and Institutional Economics Review, 3(1), 89–108. https://doi.org/10.14441/eier.3.89 Kohli, A. K., & Jaworski, B. J. (1990). Market orientation: The construct, research propositions, and managerial implications. Journal of Marketing, 54(2), 1–18. https://doi.org/10.1177/002224299005400201 Korsgaard, M. A., Brower, H. H., & Lester, S. W. (2015). It isn’t always mutual: A critical review of dyadic trust. Journal of Management, 41(1), 47–70. https://doi.org/ 10.1177/0149206314547521 Krause, D., Luzzini, D., & Lawson, B. (2018). Building the case for a single key informant in supply chain management survey research. The Journal of Supply Chain Management, 54(1), 42–50. https://doi.org/10. 1111/jscm.12159 Krishnan, R., Martin, X., & Noorderhaven, N. G. (2006). When does trust matter to alliance performance? Academy of Management Journal, 49(5), 894–917. https://doi.org/10.5465/amj.2006.22798171 Krishnan, T., & Poulose, S. (2016). Response rate in industrial surveys conducted in India: Trends and implications. IIMB Management Review, 28(2), 88–97. https://doi.org/10.1016/j.iimb.2016.05.001 Kroeber, A. L., & Kluckhohn, C. (1952). Culture: A critical review of concepts and definitions. Papers, 47(1– viii), 223. Peabody Museum of Archaeology & Ethnology, Harvard University. Lages, L. F. (2000). A conceptual framework of the determinants of export performance: Reorganizing key variables and shifting contingencies in export marketing. Journal of Global Marketing, 13(3), 29–51. https://doi.org/10.1300/J042v13n03_03 Leonidou, L. C., Barnes, B. R., & Talias, M. A. (2006). Exporter–importer relationship quality: The inhibiting role of uncertainty, distance, and conflict. Industrial Marketing Management, 35(5), 576–588. https://doi. org/10.1016/j.indmarman.2005.06.012 Leonidou, L. C., Katsikeas, C. S., & Hadjimarcou, J. (2002). Executive insights: Building successful export business relationships: A behavioral perspective. Journal of International Marketing, 10(3), 96–115. https://doi. org/10.1509/jimk.10.3.96.19543 Leonidou, L. C., Samiee, S., Aykol, B., & Talias, M. A. (2014). Antecedents and outcomes of exporter–importer relationship quality: Synthesis, meta-analysis, and directions for further research. Journal of International Marketing, 22(2), 21–46. https://doi.org/ 10.1509/jim.13.0129 Lindell, M. K., & Whitney, D. J. (2001). Accounting for common method variance in cross-sectional research designs. Journal of Applied Psychology, 86 (1), 114. https://doi.org/10.1037/0021-9010.86.1.114 Lui, S. S., Ngo, H.-Y., & Hon, A. H. (2006). Coercive strategy in interfirm cooperation: Mediating roles of interpersonal and interorganizational trust. Journal of Business Research, 59(4), 466–474. https://doi.org/10. 1016/j.jbusres.2005.09.001 Luo, Y. (2002). Building trust in cross-cultural collaborations: Toward a contingency perspective. Journal of Management, 28(5), 669–694. https://doi.org/10. 1177/014920630202800506 Luo, Y., Liu, Y., Yang, Q., Maksimov, V., & Hou, J. (2015). Improving performance and reducing cost in buyer-supplier relationships: The role of justice in curtailing opportunism. Journal of Business Research, 68(3), 607–615. https://doi.org/10.1016/j.jbusres.2014.08.011 Macneil, I. R. (1980). The new social contract. Yale University Press. Mason, R. B., & Staude, G. (2009). An exploration of marketing tactics for turbulent environments. Industrial Management & Data Systems. Mayer, R. C., Davis, J. H., & Schoorman, F. D. (1995). An integrative model of organizational trust. The Academy of Management Review, 20(3), 709–734. https://doi.org/10.2307/258792 Medlin, C. J. (2003). Relationship performance: A relationship level construct. IMP conference proceedings, In I. Snehota & R. Fiocca (Eds.), Proceedings of the 19th Annual IMP Conference: 2003 (Lugano, Switzerland.) (pp. 1–13). Moorman, C., Zaltman, G., & Deshpande, R. (1992). Relationships between providers and users of market research: The dynamics of trust within and between organizations. Journal of Marketing Research, 29(3), 314–328. https://doi.org/10.1177/ 002224379202900303 Ahamed & Noboa, Cogent Business & Management (2023), 10: 2256953 https://doi.org/10.1080/23311975.2023.2256953 Page 17 of 22 Morgan, R. M., & Hunt, S. D. (1994). The commitment-trust theory of relationship marketing. Journal of Marketing, 58(3), 20–38. https://doi.org/10.1177/ 002224299405800302 Morosini, P., Shane, S., & Singh, H. (1998). National cultural distance and cross-border acquisition performance. Journal of International Business Studies, 29(1), 137–158. https://doi.org/10.1057/pal grave.jibs.8490029 Nes, E. B., Solberg, C. A., & Silkoset, R. (2007). The impact of national culture and communication on exporter– distributor relations and on export performance. International Business Review, 16(4), 405–424. https://doi.org/10.1016/j.ibusrev.2007.01.008 North, C., O’Donnell, E., & Marsh, L. (2017). The economics of trust in buyer-seller relationships: A transaction cost perspective. Global Journal of Management and Marketing, 1(1), 81. Obadia, C. (2013). Foreigness-induced cognitive disorientation. Management International Review, 53(3), 325–360. https://doi.org/10.1007/s11575-012-0149-9 Obadia, C., & Vida, I. (2011). Cross-border relationships and performance: Revisiting a complex linkage. Journal of Business Research, 64(5), 467–475. https:// doi.org/10.1016/j.jbusres.2010.03.006 O’Grady, S., & Lane, H. W. (1996). The psychic distance paradox. Journal of International Business Studies, 27 (2), 309–333. https://doi.org/10.1057/palgrave.jibs. 8490137 O’Toole, T., & Donaldson, B. (2002). Relationship performance dimensions of buyer-supplier exchanges. European Journal of Purchasing & Supply Management, 8(4), 197–207. https://doi.org/10.1016/ S0969-7012(02)00008-4 Palmatier, R. W., Dant, R. P., & Grewal, D. (2007). A comparative longitudinal analysis of theoretical perspectives of interorganizational relationship performance. Journal of Marketing, 71(4), 172–194. https://doi.org/10.1509/jmkg.71.4.172 Papadopoulos, N., Martín, O. M., Sousa, C. M., & Lages, L. F. (2011). The PD scale: A measure of psychic distance and its impact on international marketing strategy. International Marketing Review, 28(2), 201–222. https://doi.org/10.1108/02651331111122678 Park, H., Han, K., & Joon, W. (2018). The impact of cultural distance on the performance of foreign subsidiaries: Evidence from the Korean market. Organizations and Markets in Emerging Economies, 9(1), 123–134. https://doi.org/10.15388/omee.2018.10.00007 Paul, J., & Mas, E. (2020). Toward a 7-P framework for international marketing. Journal of Strategic Marketing, 28(8), 681–701. https://doi.org/10.1080/ 0965254X.2019.1569111 Perrow, C. B. (1970). Organizational analysis: A sociological view. Brooks/Cole. Pham, H. S. T., & Petersen, B. (2021). The bargaining power, value capture, and export performance of Vietnamese manufacturers in global value chains. International Business Review, 30(6), 101829. https:// doi.org/10.1016/j.ibusrev.2021.101829 Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879. https://doi.org/10.1037/0021- 9010.88.5.879 Poppo, L., Zhou, K. Z., & Li, J. J. (2016). When can you trust “trust”? Calculative trust, relational trust, and supplier performance. Strategic Management Journal, 37 (4), 724–741. https://doi.org/10.1002/smj.2374 Porter, M. E. (1980). Industry structure and competitive strategy: Keys to profitability. Financial Analysts Journal, 36(4), 30–41. https://doi.org/10.2469/faj.v36.n4.30 Rempel, J. K., Holmes, J. G., & Zanna, M. P. (1985). Trust in close relationships. Journal of Personality and Social Psychology, 49(1), 95–112. https://doi.org/10.1037/ 0022-3514.49.1.95 Riddle, L. A., & Gillespie, K. (2003). Information sources for new ventures in the Turkish clothing export industry. Small Business Economics, 20(1), 105–120. https:// doi.org/10.1023/A:1020252606058 Rindfleisch, A., & Heide, J. B. (1997). Transaction cost analysis: Past, present, and future applications. Journal of Marketing, 61(4), 30–54. https://doi.org/10. 1177/002224299706100403 Sabel, C. F. (1993). Studied trust: Building new forms of cooperation in a volatile economy. Human Relations, 46(9), 1133–1170. https://doi.org/10.1177/ 001872679304600907 Samiee, S., & Chirapanda, S. (2019). International marketing strategy in emerging-market exporting firms. Journal of International Marketing, 27(1), 20–37. https://doi.org/10.1177/1069031X18812731 Seppänen, R., Blomqvist, K., & Sundqvist, S. (2007). Measuring inter-organizational trust—a critical review of the empirical research in 1990–2003. Industrial Marketing Management, 36(2), 249–265. https://doi.org/10.1016/j.indmarman.2005.09.003 Shenkar, O. (2001). Cultural distance revisited: Towards a more rigorous conceptualization and measurement of cultural differences. Journal of International Business Studies, 32(3), 519–535. https://doi.org/10. 1057/palgrave.jibs.8490982 Shenkar, O. (2012). Beyond cultural distance: Switching to a friction lens in the study of cultural differences. Journal of International Business Studies, 43(1), 12–17. https://doi.org/10.1057/jibs.2011.42 Simonin, B. L. (1999). Transfer of marketing know-how in international strategic alliances: An empirical investigation of the role and antecedents of knowledge ambiguity. Journal of International Business Studies, 30(3), 463–490. https://doi.org/10.1057/palgrave.jibs. 8490079 Skarmeas, D., Katsikeas, C. S., Spyropoulou, S., & Salehi- Sangari, E. (2008). Market and supplier characteristics driving distributor relationship quality in international marketing channels of industrial products. Industrial Marketing Management, 37(1), 23–36. https://doi.org/10.1016/j.indmarman.2007.04.004 Smith, M., Dowling, P. J., & Rose, E. L. (2011). Psychic distance revisited: A proposed conceptual framework and research agenda. Journal of Management & Organization, 17(1), 123–143. https://doi.org/10. 5172/jmo.2011.17.1.123 Solberg, C. A. (2006). Relational Drivers, Controls and Relationship Quality in Exporter–Foreign Middleman Relations. In C. Arthur Solberg (Ed.), Relationship Between Exporters and Their Foreign Sales and Marketing Intermediaries (Advances in International Marketing (Vol. 16, pp. 81–105). Emerald Group Publishing Limited. https://doi.org/10.1016/S1474- 7979(05)16004-9 Sousa, C. M. (2004). Export performance measurement: An evaluation of the empirical research in the literature. Academy of Marketing Science Review, 9 (12), 1–23. Sousa, C. M., & Bradley, F. (2006). Cultural distance and psychic distance: Two peas in a pod? Journal of International Marketing, 14(1), 49–70. https://doi.org/ 10.1509/jimk.14.1.49 Ahamed & Noboa, Cogent Business & Management (2023), 10: 2256953 https://doi.org/10.1080/23311975.2023.2256953 Page 18 of 22 Srivastava, P., Srinivasan, M., & Iyer, K. N. (2015). Relational resource antecedents and operational outcome of supply chain collaboration: The role of environmental turbulence. Transportation Journal, 54(2), 240–274. https://doi.org/10.5325/transportationj.54.2.0240 Stump, R. L., & Heide, J. B. (1996). Controlling supplier opportunism in industrial relationships. Journal of Marketing Research, 33(4), 431–441. https://doi.org/ 10.1177/002224379603300405 Stump, R. L., & Joshi, A. W. (1999). To be or not to be [locked in]: An investigation of buyers’ commitments of dedicated investments to support new transactions. Journal of Business-To-Business Marketing, 5(3), 33–63. https://doi.org/10.1300/J033v05n03_03 Styles, C., & Ambler, T. (2000). The impact of relational variables on export performance: An empirical investigation in Australia and the UK. Australian Journal of Management, 25(3), 261–281. https://doi. org/10.1177/031289620002500302 Styles, C., Patterson, P. G., & Ahmed, F. (2008). A relational model of export performance. Journal of International Business Studies, 39(5), 880–900. https://doi.org/10.1057/palgrave.jibs.8400385 Tesfom, G., Lutz, C., & Ghauri, P. (2004). Comparing export marketing channels: Developed versus developing countries. International Marketing Review, 21(4/5), 409–422. https://doi.org/10.1108/ 02651330410547117 Vanneste, B. S. (2016). From interpersonal to interorganisational trust: The role of indirect reciprocity. Journal of Trust Research, 6(1), 7–36. https://doi.org/ 10.1080/21515581.2015.1108849 Wang, L., Jiang, F., Li, J., Motohashi, K., & Zheng, X. (2019). The contingent effects of asset specificity, contract specificity, and trust on offshore relationship performance. Journal of Business Research, 99, 338–349. https://doi.org/10.1016/j. jbusres.2019.02.055 Wathne, K. H., & Heide, J. B. (2000). Opportunism in interfirm relationships: Forms, outcomes, and solutions. Journal of Marketing, 64(4), 36–51. https:// doi.org/10.1509/jmkg.64.4.36.18070 Williamson, O. E. (1985). The economic institutions of capitalism: Firms, markets, relational contracting. The Free Press. Williamson, O. E. (1991). Comparative economic organization: The analysis of discrete structural alternatives. Administrative Science Quarterly, 36(2), 269–296. https://doi.org/10.2307/2393356 World Bank Enterprise Survey. (2017), Washington DC, World Bank, available at: Retrieved: February 1, 2018, from https://microdata.worldbank.org/index.php/cat alog/3396andhttps://www.enterprisesurveys.org/en/ methodology. Zaheer, A., McEvily, B., & Perrone, V. (1998). Does trust matter? Exploring the effects of interorganizational and interpersonal trust on performance. Organization Science, 9 (2), 141–159. https://doi.org/10.1287/orsc.9.2.141 Zaheer, A., & Venkatraman, N. (1995). Relational governance as an interorganizational strategy: An empirical test of the role of trust in economic exchange. Strategic Management Journal, 16(5), 373–392. https://doi.org/10.1002/smj.4250160504 Zanger, C., Hodicová, R., & Gaus, H. (2008). Psychic distance and cross—border cooperation of SMEs: An empirical study on Saxon and Czech entrepreneurs’ interest in cooperation. Journal for East European Management Studies, 13(1), 40–62. https://doi.org/10. 5771/0949-6181-2008-1-40 Zhang, C., Cavusgil, S. T., & Roath, A. S. (2003). Manufacturer governance of foreign distributor relationships: Do relational norms enhance competitiveness in the export market? Journal of International Business Studies, 34(6), 550–566. https://doi.org/10. 1057/palgrave.jibs.8400051 Zhong, W., Su, C., Peng, J., & Yang, Z. (2017). Trust in interorganizational relationships: A meta-analytic integration. Journal of Management, 43(4), 1050–1075. https://doi.org/10.1177/0149206314546373 Zou, S., & Stan, S. (1998). The determinants of export performance: A review of the empirical literature between 1987 and 1997. International Marketing Review, 15(5), 333–356. https://doi.org/10.1108/ 02651339810236290 Ahamed & Noboa, Cogent Business & Management (2023), 10: 2256953 https://doi.org/10.1080/23311975.2023.2256953 Page 19 of 22 Appendices Appendix 1: Measurement Model (N = 142) Items Mean SD Var Loading Alpha Perceived cultural distance 0.91 economic and industrial development 5.96 1.48 2.20 0.80 communications infrastructure 5.04 1.75 3.07 0.76 marketing infrastructure 5.32 1.68 2.82 0.85 technical requirements 4.84 1.88 3.54 0.80 market competitiveness 5.55 1.64 2.68 0.79 legal regulations 5.39 1.73 2.99 0.86 culture in general 5.28 1.77 3.14 0.82 Market turbulence * 0.81 In our line of business, importer preferences change rapidly 4.12 1.86 3.45 0.86 There are always new importer demands in the market we serve 4.75 1.67 2.80 0.84 It is difficult to monitor importer demands in the market we serve 4.13 1.77 3.15 0.69 In our industry importer preferences in terms of quality are always changing 3.98 1.75 3.06 0.80 Exporter specific assets 0.88 made significant investments in resources dedicated 4.49 1.73 2.99 0.86 operating process has been tailored 4.70 1.81 3.28 0.78 involved substantial commitments of time and money 4.25 1.78 3.16 0.80 unusual technological norms and standards 3.97 1.78 3.16 0.80 (Continued) Ahamed & Noboa, Cogent Business & Management (2023), 10: 2256953 https://doi.org/10.1080/23311975.2023.2256953 Page 20 of 22 Items Mean SD Var Loading Alpha If we end business with the importer, we would lose a lot of investment we have made in this resource 3.89 1.79 3.20 0.79 be wasting a lot of knowledge regarding the importer’s method of operation 3.65 1.73 3.00 0.74 Interorganizational Trust * 0.89 working with us for a long time 5.64 1.40 1.96 0.73 evenhanded in their negotiation with us 5.39 1.38 1.91 0.68 complete confidence rely to keep promises made to us 5.72 1.28 1.65 0.85 is trustworthy 6.06 1.06 1.12 0.80 is perfectly honest and truthful 5.87 1.15 1.33 0.87 is always faithful 5.25 1.58 2.49 0.79 has high integrity 5.97 1.15 1.32 0.83 Relationship export performance 0.87 has helped us achieve a dominant market position in our industry 4.96 1.62 2.62 0.88 has helped us increase our sales volume 5.50 1.49 2.22 0.84 have helped us improve our work efficiency 5.08 1.67 2.80 0.84 have received high-quality sales support 5.02 1.69 2.87 0.85 Financial Export Performance 0.90 In terms of export sales growth 4.93 1.55 2.39 0.91 In terms of export profit growth 4.69 1.49 2.22 0.88 In terms of return on investment 4.87 1.39 1.93 0.85 In terms of market share achieved 4.82 1.58 2.51 0.86 Notes: SD = standard deviation, Load = CFA standardized regression weights, Var = variance, Alpha= Cronbach’s alpha. * = purified scale Ahamed & Noboa, Cogent Business & Management (2023), 10: 2256953 https://doi.org/10.1080/23311975.2023.2256953 Page 21 of 22 Appendix 2 Figure A1. Three exchange risks model (A) with the measurement items. Figure A2. Three exchange risks model (B) with measurement items. Ahamed & Noboa, Cogent Business & Management (2023), 10: 2256953 https://doi.org/10.1080/23311975.2023.2256953 Page 22 of 22