The traders' dilemma: The adverse consequences of superior performance in mediated exchanges

Paul D. Ellis

International Business Review, 2005, vol. 14, issue 4, 375-396

Abstract: Manufacturers entering new foreign markets may opt to outsource their exporting activities to a specialist intermediary. In this study, evidence is provided establishing that the link between manufacturers' perceptions of intermediary performance and the likelihood of their terminating the arrangement is U-shaped. In doing so, this study demonstrates the existence of the so-called 'traders' dilemma' which refers to the increased risk of termination arising from superior intermediary performance. Based on data collected from manufacturer-clients, the findings reveal that the traders' dilemma is robust under varying conditions of exchange uncertainty, cultural distance and relationship age when intermediary performance is measured in terms of stimulating demand.

Keywords: Export; intermediary; Termination; propensity; Performance; in; distribution; channels (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (5)

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