Overcoming export manufacturer's dilemma in international expansion

Wu, Fang; Sinkovics, Rudolf R.; Cavusgil, S. Tamer; Roath, Anthony S.

Abstract

Learning and acquiring local market knowledge from foreign distributors are central to manufacturers' export market performance. Drawing from the resource-based view, we propose that manufacturers need to develop stronger local market competence while simultaneously minimizing the costs of distributor opportunism in order to compete successfully in the export market. Cultural distance and other barriers, however, may hinder the development of local market competence for the manufacturer while contributing to the occurrence of distributor opportunism. In order to overcome these barriers, we examine the impact of three alternative forms of manufacturer governance – trust, knowledge sharing, and contract-based relationship – in export channels. Findings suggest that all three governance mechanisms contribute to enhancing the manufacturer's competence to exploit local market opportunity. However, of the three, trust seems to be the only effective way to curtail distributor opportunism.

Citation

Wu, F., Sinkovics, R. R., Cavusgil, S. T., & Roath, A. S. (2007). Overcoming export manufacturer's dilemma in international expansion. Journal of International Business Studies, 38(2), Article 283-302. https://doi.org/10.1057/palgrave.jibs.8400263

• Journal Article Type: Article
• Online Publication Date: Mar 21, 2007
• Publication Date: Mar 1, 2007
• Deposit Date: Sep 25, 2024
• Journal: Journal of International Business Studies
• Print ISSN: 0047-2506
• Electronic ISSN: 1478-6990
• Publisher: Palgrave Macmillan
• Peer Reviewed: Peer Reviewed
• Volume: 38
• Issue: 2
• Article Number: 283-302
• DOI: https://doi.org/10.1057/palgrave.jibs.8400263
• Keywords: manufacturer–foreign distributor relationship, export market performance, organizational capabilities, local market competence, distributor opportunism
• Public URL: https://durham-repository.worktribe.com/output/2772839