An integrated perspective of social exchange theory and transaction cost approach on the antecedents of trust in international joint ventures

Saba Khalid, Tahir Ali

Research output: Contribution to journalArticlepeer-review

33 Citations (Scopus)

Abstract

This study investigates the antecedents of trust in International Joint Ventures (IJVs). Building on social exchange theory (SET) and transaction cost theory (TCT), we develop an integrated framework in which trust development requires two sets of antecedents: (1) social antecedents (prior alliance experience with partner, partner's cultural sensitivity and reputation, inter-partner communication, expected longevity of the IJVs), and (2) structural antecedents (interdependence, ownership share, resource complementary). The developed framework is tested using web-survey data collected from 89 IJVs established by Nordic firms in Asia, Europe and America. Empirical data analysis based on structural equation modelling suggests that a partner's cultural sensitivity and reputation, inter-partner communication, and expected longevity are the social antecedents from SET that enhance trust. From TCA, the structural antecedent of resource complementary develops trust, while balanced interdependence and balanced ownership are unrelated to trust. These findings have important implications for managers planning to form and manage IJVs.

Original languageEnglish
Pages (from-to)491-501
Number of pages11
JournalInternational Business Review
Volume26
Issue number3
DOIs
Publication statusPublished - Jun 2017
Externally publishedYes

Keywords

  • International joint venture
  • Social antecedent
  • Social exchange theory
  • Structural antecedent
  • Transaction cost aproach
  • Trust

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Marketing

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