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The Determinants of Local Suppliers’ Trust Towards Foreign Buyers

Author

Listed:
  • En Xie

    (Xi’an Jiaotong University)

  • Yuan Li

    (Xi’an Jiaotong University
    Shanghai Jiatong University)

  • Zhongfeng Su

    (Nanjing University)

  • Hock-Hai Teo

    (National University of Singapore)

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.

Suggested Citation

  • En Xie & Yuan Li & Zhongfeng Su & Hock-Hai Teo, 2010. "The Determinants of Local Suppliers’ Trust Towards Foreign Buyers," Management International Review, Springer, vol. 50(5), pages 585-611, October.
    • Handle: RePEc:spr:manint:v:50:y:2010:i:5:d:10.1007_s11575-010-0050-3
    DOI: 10.1007/s11575-010-0050-3
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