Effects of cultural ethnicity, firm size, and firm age on senior executives’ trust in their overseas business partners: Evidence from China

Crystal X Jiang, Roy YJ Chua, Masaaki Kotabe and Janet Y Murray
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Crystal X Jiang: Bryant University, Smithfield, USA
Roy YJ Chua: Harvard Business School, Harvard University, Boston, USA
Masaaki Kotabe: The Fox School of Business, Temple University, Philadelphia, USA
Janet Y Murray: Department of Marketing, University of Missouri-St Louis, St Louis, USA

Journal of International Business Studies, 2011, vol. 42, issue 9, 1150-1173

Abstract: We investigate trust relationships between senior business executives and their overseas partners. Drawing on the similarity-attraction paradigm, social categorization theory, and the distinction between cognition- and affect-based trust, we argue that executives trust their overseas partners differently, depending on the partners’ cultural ethnicity. In a field survey of 108 Chinese senior executives, we found that these executives have higher affect-based trust in overseas partners of the same cultural ethnicity as themselves; cognition-based trust is associated with affect-based trust differently when overseas partners are of the same or different cultural ethnicity. We also examine the role of relative firm size and age in shaping intra- and intercultural trust. Relative firm size has a stronger negative effect on executives’ cognition-based trust if their partners are of a different cultural ethnicity. Although firm age does not have a negative effect on executives’ affect-based trust as hypothesized, we found firm age to be positively associated with affect-based trust for partners of the same cultural ethnicity. We discuss theoretical and practical implications of this pattern of inter- and intra-cultural trust on international business and networking (guanxi) dynamics in China.

Date: 2011
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