Dependence Structure, Trust Dimensions, and Governance Choices in Asian Marketing Channels: Evidence in China

Abstract

Building on three decades' worth of theoretical work on firm dependence structure and firm governance strategy, from a dyadic perspective we investigate the mediating effects of different facets of interorganizational trust (competence trust and benevolence trust) on firm governance choices.We posit that firm dependence may evoke different facets of trust, which in turn lead to the firm's choice of different governance mechanisms (contractual bonds and relational exchange).Using Chinese supplier-buyer dyads and the novel actor-partner interdependence model, we find strong support for such intermediate effects of trust dimensions on the relationships between dependence structure and governance choices from both supplier and buyer data.Practical implications for Asian business are discussed, and directions for future research are suggested.

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