Overcoming export manufacturers’ dilemma in international expansion

Fang Wu, Rudolf Sinkovics (), S Tamer Cavusgil and Anthony S Roath
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Fang Wu: School of Management, University of Texas at Dallas, Richardson, TX, USA
S Tamer Cavusgil: Department of Marketing and Supply Chain Management, Michigan State University, East Lansing, MI, USA
Anthony S Roath: Division of Marketing and Supply Chain Management, The University of Oklahoma, Norman, OK, USA

Journal of International Business Studies, 2007, vol. 38, issue 2, 283-302

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. Journal of International Business Studies (2007) 38, 283–302. doi:10.1057/palgrave.jibs.8400263

Date: 2007
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