Joint and interactive effects of trust and (inter) dependence on relational behaviors in long-term channel dyads

Industrial Marketing Manage

Joint and interactive effects of trust and (inter) dependence on

relational behaviors in long-term channel dyads

Cengiz Yilmaza,*, Bulent Sezenb,1, Ozlem Ozdemirc,2

aBogazici University, Department of Business Administration, 80815 Bebek, Istanbul, TurkeybGebze Institute of Technology, Department of Business Administration, Cayirova Fabrikalar Yolu No. 101, 41400 Gebze, Kocaeli, Turkey

cYeditepe University, Turkey, Department of Economics, 34755 KaysSdag-Kadikoy-Istanbul, Turkey

Received 1 April 2003; received in revised form 1 March 2004; accepted 1 July 2004

Available online 23 November 2004

Abstract

The authors investigate the effects of trust on the relational behaviors of firms in long-term channel dyads across different interdependence

structures. Based on the long-term nature of the empirical setting, trust is posited to exert a positive effect on the emergence of relational

behaviors in all interdependence conditions. This positive effect of trust is hypothesized to be stronger in highly and symmetrically

interdependent channel dyads than in low-interdependence-type symmetric dyads. In addition, for both relatively more dependent and relatively

less dependent members of asymmetric dyads, the effect size of trust is hypothesized to increase as the perceived level of interdependence

asymmetry increases. Data collected from automobile dealers in Turkey reveal that trust in the supplier has the strongest positive effect on the

relational behaviors of dealers in asymmetric dealer–supplier dyads that perceive themselves relatively less dependent than their suppliers. For

relatively more dependent dealers, trust is found to exert a modest positive effect. In symmetrically interdependent dealer–supplier dyads, trust

exerts a modest positive effect on dealer relational behaviors in the lowmutual dependence condition, and this effect size reduces to the point of

nonsignificance in the high mutual dependence condition. Theoretical and managerial implications of these findings are discussed.

D 2004 Elsevier Inc. All rights reserved.

Keywords: Channel relationships; Relational behaviors; Trust; Dependence; Moderated regression analysis

A central theme of channels of distribution theory and

research is that channel firms need to develop policies and

programs to evoke and maintain desired forms of behaviors

from independent partners in the distribution network

(Frazier, 1999; Kumar, Stern, & Achrol, 1992; Stern &

El-Ansary, 1992). As a result, a growing body of research

has focused on channel member behaviors that are

conforming, supportive, constructive, and/or cooperative

in nature, namely, relational behaviors. In channel systems

where relational behaviors prevail, firms (1) respond

flexibly to each other’s requests, (2) exchange critical

0019-8501/$ - see front matter D 2004 Elsevier Inc. All rights reserved.

doi:10.1016/j.indmarman.2004.07.005

* Corresponding author. Tel.: +90 212 359 5400x6503; fax: +90 212 263

7386.

E-mail addresses: [email protected] (C. Yilmaz)8

[email protected] (B. Sezen)8 [email protected] (O. Ozdemir).1 Tel.: +90 262 653 8497x1222.2 Tel.: +90 216 578 0650; fax: +90 216 578 0797.

information, (3) try to solve mutual and individual

problems jointly, and (4) act in solidarity (Lusch & Brown,

1996). Thus, virtually all forms of relational behaviors are

theorized as promoting effective interorganizational coor-

dination and thereby improving the efficiency and effec-

tiveness of channel systems (Anderson & Narus, 1990;

Morgan & Hunt, 1994; Noordewier, John, & Nevin, 1990).

As widely noted in the channels literature (e.g., Stern &

El-Ansary, 1992), a relational orientation is vital for

competitive success particularly in long-term channel

relationships, such as those in dealership networks and

franchise systems, which are characterized by an ongoing

process of past and future interactions.

Included among the various research streams exploring

how such a relational orientation can be promoted in channel

systems are works on channel control (e.g., Anderson,

Lodish, & Weitz, 1987), transaction cost analysis (e.g.,

Heide, 1994), interfirm power and influence attempts (e.g.,

ment 34 (2005) 235–248

C. Yilmaz et al. / Industrial Marketing Management 34 (2005) 235–248236

Frazier, 1983), the nature and resolution of conflict across

channel partners (e.g., Frazier & Rody, 1991), dynamics of

long-term, relational exchange partnerships (e.g., Dwyer,

Schurr, & Oh, 1987), contract design and enforcement (e.g.,

Heide, Dutta, & Bergen, 1998), and the institutional

framework surrounding the channel system (e.g., Grewal

& Dharwadkar, 2002). As Lusch and Brown (1996)

demonstrate empirically, variables from each of these

research streams exert distinct and significant effects on

relational behaviors. At the same time, the two most

prominent theoretical approaches in explaining relational

behaviors of channel firms have traditionally been the

power-dependence theory, which denotes a central nomo-

logical role to the construct of dependence, and the

relationship marketing theory, which states that trust in

the exchange partner is the underlying foundation of

relational exchange.

Despite the theoretically and empirically well-established

importance of trust and dependence, however, very few

channels studies (cf. Andaleeb, 1995, 1996; Geyskens,

Steenkamp, Scheer, & Kumar 1996; Hewett & Bearden,

2001) incorporate both constructs in a single empirical

model and investigate the mechanisms through which these

factors interact as they jointly facilitate the emergence of

relational behaviors. Specifically, given that the dependence

structure in a channel relationship represents a relatively

rigid structural parameter for policy design and implementa-

tion, a greater understanding of the role of trust in different

interdependence structures, that is, high versus low inter-

dependence conditions and symmetric versus asymmetric

interdependence conditions, is warranted. It is also important

to note that exploring such interactions between trust and

(inter) dependence is particularly relevant for long-term

channel relationships. Long-term business relationships are

generally characterized by strong contractual bonds, sub-

stantial idiosyncratic investments, and joint efforts and risk

sharing on several dimensions. Some reasonable (but

varying) level of trust is therefore expected to exist in

long-term channel dyads regardless of the interdependence

structure. Accordingly, the present study is conducted in a

long-term channel setting to address the following questions:

Is it the perceived degree of (inter) dependence or the level of

trust placed in the (long-term) channel partner that primarily

determines a firm’s tendency to engage in relational

behaviors? In what way does the effect (size) of trust on

relational behaviors vary across channel dyads characterized

by (1) high interdependence situations versus low interde-

pendence situations and (2) symmetric interdependence

structures versus asymmetric interdependence structures?

And, what impact, if any, does trust have on the relational

behaviors of (1) firms with power advantages and (2) firms

with power disadvantages in asymmetric channel dyads?

Thus, the central thesis of the study is that the extent to

which trust in the partner will foster relational behaviors in

long-term channel dyads is contingent upon the perceived

interdependence structure. To investigate the viability of this

thesis, the study surveys new-car automobile dealers in

Turkey and examines joint and interactive effects of three

focal constructs on dealer relational behaviors toward

supplier firms: (1) dealer dependence on the supplier, (2)

dealer perceptions of supplier dependence, and (3) dealer

trust in the supplier.

1. Conceptual background and research hypotheses

1.1. Relational behaviors

The conceptualization of relational behaviors in this

study relies heavily on the relational exchange norms

framework developed by Macneil (1980). The most

prominent aspects of relational norms as they apply in

channel relationships are that they (1) promote long-term

mutuality of interests and (2) prescribe bstewardshipQ typebehaviors (Heide & John, 1992, p. 34). Accordingly,

Wathne and Heide (2000, p. 40) note, bamong the most

central relational norms are (1) the expectation of sharing

benefits and burdens and (2) restraints on unilateral use of

power.Q Given the eminently large conceptual domain of

relationalism in the social exchange literature, however,

researchers exploring the behavioral reflections of relational

norms in the channels area (e.g., Lusch & Brown, 1996)

have generally focused on a workable core set of three

relational behaviors, namely, flexibility, information

exchange, and solidarity. Following these precedents, the

focus of the present study is on dealer behaviors toward

supplier firms that (1) reflect a willingness to act respon-

sively and make adaptations when faced with specific

supplier requests, i.e., flexibility, (2) involve timely and

accurate exchange of critical information, i.e., information

exchange, and (3) are directed specifically toward relation-

ship maintenance, i.e., solidarity (Heide & John, 1992).

Flexibility and information exchange are critical drivers of

effective coordination particularly in channel environments

characterized by frequent unexpected changes and high

levels of uncertainty, whereas solidarity is an important

component of success for virtually all channel contexts

(Lusch & Brown, 1996).

1.2. Trust, dependence, and relational behaviors in long-

term channel relationships

Researchers embracing the relationship marketing para-

digm posit that the key antecedent factor for a relational

orientation to flourish in channel dyads is trust in the

exchange partner (Morgan & Hunt, 1994). Defined as

willingness to rely on an exchange partner in whom one has

confidence (Moorman, Zaltman, & Deshpande, 1992), trust

has been shown to reduce perceived uncertainty, facilitate

risk-taking behaviors, and foster a cooperative and/or

constructive orientation (e.g., Morgan & Hunt, 1994). On

the other hand, many proponents of the power-dependence

C. Yilmaz et al. / Industrial Marketing Management 34 (2005) 235–248 237

paradigm (e.g., Frazier, 1999) believe that recent research in

the channels area has devoted imbalanced attention to

relational sentiments such as trust and has neglected to focus

on the construct of power, that is, a firm’s bpotential to

influence on the other firm’s beliefs, attitudes, and

behaviorsQ (p. 227). Proponents of this latter view assert

that it is the existence of high joint power, particularly

power based on dependence, which serves as the underlying

foundation of bstrongQ channel partnerships. Dependence is

defined as a firm’s need to maintain its business relationship

with the partner to achieve its goals (e.g., Frazier, 1983). It

is traditionally theorized as arising from (1) the value

received by the firm through its business relationship with

the partner and (2) the extent to which the channel partner

and the value received are viewed irreplaceable (e.g., Kumar,

Scheer, & Steenkamp, 1998). Therefore, when one firm is

highly dependent on a channel partner, it has an interest to

give some reception to the partner’s policies, programs, and

specific requests, because doing otherwise could mean

losing the (valuable) exchange partner or some portion of

the value received from the partner.

Accordingly, empirical research conducted within the

power-dependence paradigm has denoted a central role to the

notion of interdependence (i.e., joint dependence) in explain-

ing the attitudinal and behavioral dimensions of channel

relationships (e.g., Anderson & Narus, 1990; Frazier &

Rody, 1991). Findings suggest that a high and symmetric

interdependence structure is critical for the emergence of

trust, commitment, and relational behaviors (Gundlach &

Cadotte, 1994; Kumar, Scheer, & Steenkamp, 1995a; Lusch

& Brown, 1996; Stern & Reve, 1980). When each firm

possesses a low level of dependence, relational sentiments

and their behavioral reflections are seen as bless relevantQand bunlikely to existQ: beffective operation [in such channel

dyads] is grounded, instead, in elements such as short-term

explicit contracts, transactional product-price competition,

and mutual flexibility in bidding for and switching to

alternative partnersQ (Kumar, Scheer, & Steenkamp, 1995a,

p. 350). Likewise, channel dyads characterized by asym-

metric interdependence are found to be more dysfunctional,

less stable, and less trusting than symmetric dyads (e.g.,

Anderson & Weitz, 1989; Heide, 1994; Kumar, Scheer, &

Steenkamp, 1995a). bConventional wisdom suggests inter-

ests will diverge in such relationships and the firm with the

power advantage based on low dependence will act rather

selfishly and pressure the other firmQ (Frazier, 1999, p. 227).Thus, overall, a symmetric interdependence situation where

both parties are highly (inter)dependent on each other is

viewed as a sine qua non for relational sentiments to prevail

in marketing channel dyads.

On the other hand, evidence suggests that firms in long-

term channel systems are increasingly adopting relational

exchange policies regardless of the interdependence struc-

ture. Many long-term channel relationships are character-

ized by strong (normative and/or explicit) contractual bonds,

established customs, mutual idiosyncratic investments, joint

efforts and risk-sharing on several dimensions, and expect-

ations of continuity—virtually, the key ingredients of

relationalism (Dwyer et al., 1987). Joint activities designed

for long-term pay-offs, such as customer retention pro-

grams, electronic data interchange systems, and cooperative

product development, cooperative marketing research,

advertising, and so on, are common practices in many

(if not most) long-term channel systems. It is also

conceivable that managers of these firms will derive greater

personal satisfactions from long-term partnerships than from

arms-length business transactions. Indeed, Frazier (1999,

p. 228) notes, bsome evidence suggests that when long-term

cooperation is important and norms of fairness exist in the

channel system, [even] firms with power advantages will

attempt to mold strong and effective relationships rather

than pressuring associated firms to maximize selfish

interestsQ (cf. Frazier and Summers, 1986; Ganesan, 1993;

Kumar, Scheer, and Steenkamp, 1995b). These observations

suggest that trust not only exists in truly long-term channel

dyads, even in asymmetrically or minimally interdependent

ones, but also plays a rather important role in determining

the behavioral orientations of channel partners.

In view of the aforementioned observations, the first set

of hypotheses in this study focuses on the emergence of

relational behaviors in symmetrically interdependent long-

term channel dyads. Trust is posited to exert a significant

influence on relational behaviors in both highly interde-

pendent symmetric dyads and loosely interdependent

symmetric dyads. However, because in the high interde-

pendence condition bboth channel members have a large[r]

stake in the relationship, which makes them interested in

maintaining a quality relationship characterized by strong

relational behaviors. . .Q (Lusch & Brown, 1996, p. 24), it is

expected that trust will exert a stronger effect on relational

behaviors in highly interdependent channel dyads than in

loosely interdependent relationships.

H1a. Trust in the supplier will have positive effects on dealer

relational behaviors in both high-interdependence type and

low-interdependence-type symmetric dealer–supplier dyads.

H1b. In symmetrically interdependent dealer–supplier dyads,

the effect of trust on dealer relational behaviors will become

stronger as the level of interdependence increases.

Next, regarding the effects of trust on the relational

behaviors of firms in asymmetrically interdependent long-

term channel dyads, this study considers the more dependent

and less dependent members of such dyads separately and

investigates the role of trust for each side. This is because

trust is expected to influence the more dependent and less

dependent members of asymmetric channel dyads through

different motivational mechanisms. An understanding of

how trust works is necessary to delineate this approach.

A key aspect of trust is that it is ba belief, a sentiment, or

an expectation about an exchange partner that results from

the partner’s expertise, reliability, and intentionalityQ


(Ganesan, 1993, p. 3). Trust stems from a confidence that

the exchange partner is trustworthy and that this quality of

trustworthiness will be reflected in the partner’s future

behaviors and policies (Yilmaz & Hunt, 2001). Thus, trust

is a critical driver of risk-taking in exchange relationships.

Given that relational behaviors in the forms of sharing

information, being flexible, and acting in solidarity all entail

risk-taking, some level of trust is deemed necessary for a

relational orientation. In addition, inherent but largely

overlooked in this conceptualization of trust is the notion

that trust not only facilitates risk-taking behaviors but also

works best, that is, exerts the strongest influence on risk

taking, in high-risk situations. Many earlier studies on trust

suggest that risk or being vulnerable to the actions of

another party is a prerequisite for trust to function

(e.g., Boss, 1978; Zand, 1972). When one is capable of

fully predicting or totally controlling another’s actions, or

when there is nothing of importance to be lost, there is no

need for trust. Therefore, firms in asymmetric channel

dyads that perceive themselves as vulnerable, such as those

that are highly dependent on an exchange partner that has

minimal dependence, are expected to rely more heavily in

their behavioral dispositions than less dependent counter-

parts on the perceived trustworthiness of exchange partners.

Accordingly, for relatively more dependent parties in

asymmetric channel dyads, the positive effect of trust on

relational behaviors is expected to become stronger as the

perceived level of interdependence asymmetry increases.

H2. Trust in the supplier by relatively more dependent

dealers in asymmetric dealer–supplier dyads will have a

stronger positive effect on dealer relational behaviors as the

perceived interdependence asymmetry increases.

What impacts does trust exert on the relational behaviors

of less dependent firms in asymmetric channel dyads, then?

As noted before, power resulting from dependence varies

directly with the availability of alternative trading partners

and inversely with the value received from a partner (Cook

& Emerson, 1978). Given that powerful firms are unlikely

to face outcome uncertainties associated with partner

opportunism and/or noncompliance, it might be suggested

based on the preceding high (low) vulnerabilityYstronger

(weaker) effect of trust reasoning that trust has a minimal

bearing on the relational behaviors of less dependent (more

powerful) parties in asymmetric channel dyads. Yet,

alternatively, the inherent characteristics of long-term

channels denote at least two reasons as to why powerful

channel members may as well be highly sensitive to the

perceived trustworthiness of their partners. First, vulner-

ability encompasses more than the value received from an

exchange partner and the availability of alternative partners.

Generally speaking, vulnerability may emerge as a result of

(1) a firm’s inability to leave a given relationship without

incurring economic losses (a lock-in situation) and/or (2)

various forms of information asymmetries (Wathne &

Heide, 2000). Less dependent firms in long-term channel

relationships can therefore become vulnerable to the actions

of channel partners through several mechanisms, a non-

exhaustive list of examples including (1) investments made

in relation specific assets, (2) commitments to long-term

joint programs, and (3) critical information revealed to the

channel partner about the firm’s customer base, product

specifics, strategic orientation, technology, specific pro-

cesses, and so on. Second, many powerful channel leaders

today find their best interests in maintaining successful

relational exchanges with channel partners, thereby keeping

the entire channel system competitive. Some reasonable

level of relationalism may work as a safeguard for powerful

firms to protect their idiosyncratic investments and maintain

their advantageous positions (Heide & John, 1992). As

these firms voluntarily restrain their use of power, their

expectations regarding the compatibility of the partners’

behavioral responses with principles of trustworthiness will

be inflated substantially—that is, if I am withholding my

power in favor of a relational orientation, then I expect my

partner to reciprocate in a similar manner. These firms will

rely largely on the confirmation/disconfirmation of such

(inflated) expectations in their specific relationship policies

toward channel partners. In proportion to the level of power

withheld, opportunistic responses will be punished severely

and relational responses will be rewarded and reciprocated

accordingly. Powerful firms in asymmetric long-term

channel dyads may therefore rely more heavily than firms

in symmetric dyads on the perceived trustworthiness of

channel partners as they decide upon and implement

channel policies. That is, in truly long-term channel dyads,

trust is expected to have a stronger positive effect on the

powerful (less dependent) members’ relational behaviors as

interdependence asymmetry increases.

H3. Trust in the supplier by relatively less dependent dealers

in asymmetric dealer–supplier dyads will have a stronger

positive effect on dealer relational behaviors as perceived

interdependence asymmetry increases.

1.3. Control variables

Extant theory and research suggest that several variables

other than trust and dependence might exert significant

effects on the attitudinal and behavioral orientations of

channel firms. Most prominent among these variables are

(1) the relationship specific investments committed by both

sides of the dyad (i.e., investments in durable assets that are

idiosyncratic to that relationship and therefore are of

considerably less value outside the specific relationship)

(Williamson, 1985; Heide & John, 1990, 1992); and (2) the

perceived role performance of the channel partner, that is,

delivery speed and reliability, technical support, product and

service quality, and after-sales services (Kumar, Stern, &

Achrol, 1992). Idiosyncratic investments by the supplier

may reduce dealer expectations of supplier opportunism and

signal intentions of continued exchange (Heide & John,


1992), thereby fostering a relational orientation; whereas

idiosyncratic investments by the dealer may increase the

dealer’s tendency to comply with the supplier’s policies

because of the vulnerability that is created. Likewise,

superior supplier performances on critical role components

are likely to foster dealer voluntary efforts to reciprocate in a

similar fashion. These variables are included in the analyses

in order to control for their effects on relational behaviors.

That is, once one controls for the effects of such critical

factors, how does trust and dependence interactively

influence the emergence of relational behaviors?

2. Method

2.1. Respondent solicitation, data collection procedure, and

the sample

The data used to test the hypotheses were collected from

the owners and/or managers of new-car automobile dealer-

ships in Turkey. A comprehensive list of the 932

independent dealerships representing the entire country

was compiled through personal contacts with each of the

18 automobile supplier firms in Turkey. While some of

these supplier firms are subsidiaries and/or partners of

multinational firms that have large manufacturing facilities

in Turkey, others are importers of a brand. Therefore,

considerable variance exists across the supplier firms in

terms of marketplace power, with the largest firm holding

more than 20% market share through its large distribution

network of 120 independent dealers, and the smallest firm

holding less than 2% market share with 11 dealerships

located in major metropolitan areas only.

Consistent with the profile of new-car dealerships in

Turkey, each dealer in the sample represents a single

supplier. The dealers typically operate within exclusive

geographic territories, and these territorial protections are

based generally on industrial norms and occasionally on

contractual rights. During the initial interviews, many

dealership managers have noted that some of the supplier

firms tended to use excessive power against existing and

prospective dealers in the forms of dictating contract terms

and/or pressuring dealers to comply with a large range of

specific requests. However, a majority of the dealer–supplier

dyads exhibits the basic characteristics of long-term, rela-

tional exchanges, as demonstrated in the following sections.

In addition, included in this sampling context are a

considerable number of large dealerships that perceive

themselves more powerful than their suppliers based on

their substantial sales volume and successful customer

relations policies. Thus, the sample demonstrates a pertinent

context for the research objectives and displays adequate

variability in interdependence asymmetry (in both direc-

tions) to test the hypothesized effects.

Most of the items used for the measurement of the

constructs are adopted from previous channels studies.

Following the suggestions of Douglas and Craig (1983),

the original English versions of the questionnaire items

were first translated into Turkish by one person and then

retranslated into English by another person, each of

whom was fluent in both languages. The Turkish versions

of the questionnaire items agreed upon by both trans-

lators were then pre-tested based on face-to-face inter-

views with 10 dealership managers. The managers

commented on the items and suggested revisions. After

making the suggested modifications, the questionnaires

were mailed to the managers and/or owners of 769

dealerships located outside the city of Istanbul. Each

questionnaire packet included a cover letter explaining

the purpose of the study and assuring for anonymity.

Each respondent was also provided with a prepaid return

envelope. The remaining 163 dealerships, all of which

were located within the city of Istanbul, were contacted

in person by trained interviewers.

The response rate for the mail surveys was 16% (126

questionnaires returned), and the response rate for the face-

to-face interview attempts was 44% (72 dealers agreed to

cooperate). Six responses were eliminated from the mail

sample due to excessive amounts of missing data and/or

suspected careless responding. The two samples were

pooled after verifying that no significant differences existed

between the mail and personal contact responses on the

mean values of construct items. Thus, overall, the effective

sample size for hypothesis testing is 192, which corresponds

to an effective response rate of 21%.

2.1.1. Nonresponse bias

Tests for nonresponse bias are based on comparisons of

early and late respondents on the mean values of construct

items and such critical factors as (1) dealership sales

volume, (2) number of employees in the dealership, and

(3) duration of the dealer–supplier relationship (Armstrong

& Overton, 1977). No significant differences were detected

in these tests, suggesting that nonresponse bias may not be

a major problem for this study. That no differences were

found between the mail sample (response rate=16%) and

the sample based on face-to-face interviews (response

rate=44%) provides additional evidence for the minimal

effects of nonresponse bias.

2.1.2. Sample characteristics

The sampling process resulted in a sample that varied

substantially on dealership size (meani37 employees;

S.D.=30.9), dealership sales volume (meani593 autos

per year; S.D.=657.1), respondent tenure in the dealership

(mean=7.2 years; S.D.=6.4), and respondent tenure in the

business (mean=9.8 years; S.D.=7.2). More importantly,

the average duration of the business relationship between

the dealers and the suppliers in the final sample is 10

years (S.D.=7.1), and the average expectation for further

relationship continuation is 12 years (S.D.=6.8), thus

increasing confidence that the sampling process was


successful in terms of capturing truly long-term channel

relationships.

2.2. Measures

All constructs are measured using multiple-item, seven-

point scales with anchors Strongly Disagree (=1) and

Strongly Agree (=7), unless otherwise noted. In order to

ensure the content validity of the measures, an in depth

review of the relevant literature was undertaken prior to

measure development and extreme care and effort was

expended during item pre-testing. Measurement items are

provided in the appendix.

2.2.1. Relational behaviors

Following Lusch and Brown (1996), Heide and John’s

(1992) measures of the three interrelated relational norms

of (1) flexibility (three items), (2) information exchange

(four items), and (3) solidarity (four items) are used to

assess relational behaviors. Items in the original scales

are modified to address the extent of relationalism in

dealer behaviors toward suppliers. Consistent with Lusch

and Brown’s (1996) study, interviews with dealership

managers during questionnaire pre-testing have reinforced

the belief that these three relational behaviors are highly

relevant and appropriate in the present sampling context.

2.2.2. Dealer dependence on the supplier

Following precedents (e.g., Kumar et al., 1998),

dependence is conceptualized as a multidimensional

construct composed of the facets identified by Emerson

(1962): (1) the value received from the exchange partner

and (2) the extent to which the value received and the

partner is irreplaceable. Each facet of dependence is

measured using multiple items. Five items focusing

specifically on the degree of importance attributed by

dealers to their business relationships with suppliers are

selected from Ganesan’s (1994) global dependence scale

and used for the measurement of the bvalue receivedQcomponent. Similarly, a four-item scale is used to assess

the extent to which the supplier and the value received

are viewed as birreplaceableQ. Three of the irreplaceability

items are adopted from Celly and Frazier’s (1996)

supplier replaceability scale. An additional item, bif we

no longer represented this supplier, our sales would suffer

dramatically despite all our efforts,Q is included in the

scale to enhance content validity.

2.2.3. Dealer perceptions of supplier dependence

Dealer’s own irreplaceability is measured using mirror

images of the supplier irreplaceability items except that

dealer irreplaceability is operationalized in terms of local

market conditions. That is, dealers were asked whether

their supplier’s had alternative trading partners within

their local markets. Similarly, three items inspired from

Ganesan’s (1994) global dependence scale are used to

measure dealer perceptions of own importance to the

supplier.

2.2.4. Trust

The trust scale in Morgan and Hunt (1994) is used for

measuring dealer level of trust in the supplier. This eight-

item scale addresses the respondents’ confidence in the

integrity, reliability, competence, and general trustworthi-

ness of exchange partners.

2.2.5. Control variables

Measures of dealer relationship specific investments

(four items) and dealer perceptions of supplier relationship

specific investments (three items) address a range of

idiosyncratic investments (e.g., assets committed to dis-

plays, showroom, personnel training, customized proce-

dures, etc.). Items for these scales are adopted from

Ganesan’s (1994) measures of (1) retailer transaction

specific investments and (2) retailer perceptions of vendor

transaction specific investments. Finally, selected items

from Doney and Cannon’s (1997) study are used to assess

dealer perceptions of supplier role performance. The six

items in this scale address distinct elements of supplier role

performance and are selected based on preliminary inter-

views with dealership managers during the item pre-testing

phase of the study. The items ask respondents to compare

their suppliers with available alternatives on several aspects

of role performance. Seven-point scales anchored at Much

Worse (=1) and Much Better (=7) are used. Consistent with

how such formative scales are analyzed (Bollen & Lennox,

1991; Howell, 1987), items used for the measurement of

supplier role performance are transformed into a single

multidimensional composite score before being incorpo-

rated into the confirmatory factor analysis models, which

are discussed next.

2.3. Measure validation

The procedures used to validate the measures include

assessments of item and scale reliability, unidimensionality,

and convergent and discriminant validity. While the

statistical procedures used depend largely on confirmatory

factor analysis models, traditional methods such as explor-

atory factor analyses and coefficient alpha are also utilized.

The reliabilities of multiple-item, reflective measures are

presented in Appendix A. The coefficient alphas, composite

reliabilities, and the amount of variance captured by each

construct in relation to measurement error (i.e., average

variance extracted) are well beyond the threshold levels

suggested by Nunnally (1978) and Fornell and Larcker

(1981).

Given the large number of scale items and the moderate

sample size, the model building-up strategy suggested by

Bollen (1989) is used. The model building-up procedures

begin by examining single-construct models and continue

by combining them into larger confirmatory models. First,


single-factor exploratory and confirmatory factor analyses

are conducted for measures of each of the three dimensions

of relational behaviors (i.e., flexibility, information

exchange, and solidarity). In each of the exploratory factor

analyses, a single underlying factor is extracted using an

eigenvalue of 1 as the cutoff point, which indicates that the

flexibility, information exchange, and solidarity measures

are unidimensional. These findings are further supported by

the single-factor confirmatory factor models (i.e.,

CFIN0.90). Next, a second-order model conceptualizing

relational behaviors as a higher-order factor and the three

dimensions as first-order factors is estimated. This model

yields a significant chi-square statistic (v[41]2=93.97). How-

ever, all goodness of fit indices are at (or beyond) the

acceptable levels (Comparative Fit Index, CFI=0.94; Good-

ness-of-Fit Index, GFI=0.91; Root Mean Square Residual,

RMR=0.05), and all first- and second-order factor loadings

are significant with standardized values greater than 0.5. It is

therefore reasonable to conclude that the three distinct

relational behaviors can be conceptualized as interrelated

dimensions of a higher-order relational behaviors construct.

A single indicator of relational behaviors is derived for use

in further analyses first by averaging the items within each

dimension and then creating a multidimensional composite

score of relational behaviors based on the arithmetic mean

of these averaged values.

Dealer dependence and dealer perceptions of supplier

dependence are conceptualized as bi-dimensional constructs

(birreplaceabilityQ and bthe value receivedQ). Therefore, eachdimension is to be assessed separately for each side of the

dyad. Single factor exploratory and confirmatory factor

analyses of items measuring (1) supplier irreplaceability, (2)

supplier’s importance to the dealer, (3) dealer perceptions of

its own irreplaceability, and (4) dealer perceptions of its

importance to the supplier reveal that each one of these

measures is unidimensional and adequately reliable (see the

appendix for reliability estimates). Following prior research

(e.g., Frazier & Rody, 1991; Kumar et al., 1998), the

dimensions of birreplaceabilityQ and bvalue receivedQ are

posited to constitute formative indicators of the construct of

dependence. That is, dependence is defined as the summate

of the composite item scores of both dimensions. Consis-

tently, bi-dimensional composite scores are created for both

dealer dependence and dealer perceptions of supplier

Table 1

Construct intercorrelations and descriptive statistics

Construct M S.D. 1

(1) Dealer relational behaviors (DRB) 5.9 0.9 1

(2) Trust (DTRST) 5.1 1.5 0

(3) Dealer dependence (DDEP) 5.2 1.1 0

(4) Supplier dependence (SDEP) 5.1 1.2 0

(5) Dealer relation. Specific investments (DRSI) 6.1 1.4 0

(6) Supplier relation. Specific investments (SRSI) 3.9 1.5 0

(7) Supplier role performance (SRP) 5.4 1.1 0

Correlations above the diagonal are latent factor correlations obtained from the fu

correlations used in the regression analysis.

dependence. Note that internal consistency is not a criterion

for assessing the validity of such composites (Bollen &

Lennox, 1991); significant correlations between the depend-

ence measures and related constructs provide evidence for

their nomological validity.

Finally, after verifying the unidimensionality of the

remaining reflective scales (i.e., trust, dealer relationship

specific investments, and supplier relationship specific

investments), the full measurement model, which includes

items in all three of these reflective measures and the single

indicants representing relational behaviors, dealer depend-

ence, supplier dependence, and supplier role performance, is

evaluated. In specifying this model, the measurement error

terms for the single-indicant factors are set at 0.1 times the

variance of their respective measures (Anderson & Gerbing,

1988). This model fits the observed data adequately well

(v[135]2=290.47; CFI=0.93; GFI=0.90; RMR=0.052). All

factor loadings are large and significant, and all factor

intercorrelations are significantly below unity. Therefore, it

is concluded that the measurement scales used in the study

display adequate unidimensionality, convergent and dis-

criminant validity, and reliability (see Appendix A).

2.4. Analyses

In addition to the formative scales and higher-order

constructs that are transformed into composite scores during

the measure validation process, items of the reflective scales

are transformed into composite scores at this phase for use

in regression analysis. Table 1 reports construct intercorre-

lations, means, and standard deviations.

Tests for the hypotheses start with the estimation of the

following regression model, which includes only the bmain

effectsQ of the study variables.

DRB ¼ b0 þ b1SRPþ b2SRSIþ b3DRSI

þ b4DTRSTþ b5SDEP þ b6DDEPþ e ð1Þ

In this model, DRB denotes dealer relational behaviors,

SRP is supplier role performance, SRSI and DRSI indicate

supplier and dealer relationship specific investments, DTRST

denotes dealer trust in the supplier, and SDEP and DDEP

indicate supplier dependence and dealer dependence, respec-

2 3 4 5 6 7

.0 0.36 0.37 0.19 0.25 0.28 0.26

.30 1.0 0.41 0.31 0.12 0.52 0.68

.33 0.34 1.0 0.30 0.38 0.41 0.37

.17 0.20 0.28 1.0 0.27 0.58 0.20

.23 0.12 0.33 0.24 1.0 0.21 0.29

.21 0.39 0.28 0.37 0.16 1.0 0.43

.22 0.64 0.24 0.13 0.25 0.30 1.0

ll measurement model; correlations below the diagonal are summated scale


tively. The results of the regression analysis are reported in

Table 2. The regression model explains 17% of the observed

variance in relational behaviors, which is significantly greater

than zero (F=6.29; df=6,185; pb0.001). As shown in Table 2,

trust (b4=0.12, pb0.05), dealer dependence (b6=0.19,

pb0.01), and dealer relationship specific investments

(b3=0.12, pb0.05) are found to exert positive and significant

effects on dealer relational behaviors. A comparison of the

standardized effect sizes suggests that dealer dependence has

a greater effect than trust in the supplier on dealer relational

behaviors.

Next, the model in Eq. (2) is estimated. This extended

model includes the two- and three-way interaction terms that

reflect the joint effects of trust and (inter) dependence on

dealer relational behaviors, in addition to the predictor

variables in Eq. (1).

DRB ¼ b0 þ b1SRPþ b2SRSIþ b3DRSI

þ b4DTRSTþ b5SDEP þ b6DDEP

þ b7 SDEP� DTRSTð Þ

þ b8 DDEP� DTRSTð Þ

þ b9 SDEP� DDEPð Þ

þ b10 SDEP� DDEP� DTRSTð Þ þ e ð2ÞThe predictive variables involved in these interaction

terms are mean-centered, that is, the mean of each scale is

Table 2

Regression results

Variable Parameter

estimate

Standard

error

t-value

Unstandardized Standardized

Intercept term 5.26 0.000 0.499 10.54a

SRP �0.033 �0.039 0.077 �0.43

SRSI 0.0168 0.028 0.047 0.36

DRSI 0.116 0.165 0.051 2.25b

DTRST 0.123 0.194 0.061 2.00b

SDEP �0.0027 �0.003 0.059 �0.045

DDEP 0.185 0.229 0.062 2.99a

R-squared=0.17

F(6,185)=6.29a

Intercept term 5.12 0.000 0.585 8.8a

SRP �0.001 �0.001 0.091 �0.011

SRSI 0.0367 0.058 0.055 0.67

DRSI 0.099 0.144 0.059 1.7b

DTRST 0.119 0.182 0.072 1.66b

SDEP 0.0535 0.066 0.070 0.77

DDEP 0.180 0.213 0.076 2.35a

SDEP�DTRST �0.00964 �0.018 0.045 �0.21

DDEP�DTRST �0.0471 �0.086 0.045 �1.04

SDEP�DDEP �0.0318 �0.047 0.060 0.59

SDEP�DDEP

�DTRST

�0.0507 �0.141 0.039 �1.75b

R-squared=0.193

F(10,181)=4.2a

a pb0.01 (one-tailed tests).b pb0.05.

subtracted from each observation, to mitigate the problem

of multicollinearity and to derive unbiased parameter

estimates (Jaccard, Turrisi, & Wan, 1990). As a result of

this mean centering procedure, the maximum variance

inflation factor is calculated as 2.4 and the maximum

condition index is calculated as 26.5, suggesting that

multicollinearity is not a major problem in the analyses

(Mason & Perreault, 1991). The results obtained from the

estimation of this model are presented at the lower portion

of Table 2. This model explains 19.3% of the observed

variance in relational behaviors, which is also significantly

greater than zero (F=4.2; df=10,181; pb0.001). Further-

more, given that the three-way interaction term is found to

have a statistically significant regression coefficient

(b10=�0.051, pb0.05), general support is found for the

main study thesis that the effect size of trust on relational

behaviors is contingent upon the perceived (inter)depend-

ence structure. Tests of the specific hypothesized effects

require that the interaction effects be untangled. This is

done by differentiating Eq. (2) with respect to trust, as

shown in the Eq. (3) below

dDRB=dDTRST ¼ b4 þ b7SDEPþ b8DDEP

þ b10 SDEP� DDEPð Þ ð3Þ

Next, using Eq. (3), the effect size of trust on relational

behaviors (dDRB/dDTRST) is calculated for each interde-

pendence condition. In order to assess the statistical

significance of each effect size, the standard errors of these

estimates are calculated using the procedure described in

Jaccard et al. (1990). The results are reported in Table 3.

In H1a, for instance, it is suggested that trust exerts a

positive effect on dealer relational behaviors in symmetric

dealer–supplier dyads characterized by both high levels of

mutual dependence and low levels of mutual dependence. In

order to compute the effect size of trust in each of these

conditions, the usual practice in decomposing interaction

terms is followed and high (low) levels of SDEP and DDEP

are set at one standard deviation above (below) their mean

values. Note that, because of mean centering, the mean

values of SDEP and DDEP are zero. In addition, the

observed standard deviations of these variables are 1.18 and

1.13, respectively (see Table 1). Thus, after substituting the

appropriate values (i.e., �1.18 for SDEP and �1.13 for

DDEP for the low interdependence situation; and 1.18 for

SDEP and 1.13 for DDEP for the high interdependence

situation), the effect size of trust on relational behaviors

becomes �0.013 for the high mutual dependence condition

and 0.116 for the low mutual dependence condition. In

addition, the standard errors of these estimates are calculated

as 0.115 and 0.09, respectively. Using these values, tests for

the significance of the effect sizes suggest that the effect of

trust on relational behaviors is (1) positive and marginally

significant in the low mutual dependence condition

(t=0.1.29; pb0.1) and (2) nonsignificant in the high mutual

dependence condition (t=�0.09; ns). Thus, trust is found to

Table 3

Effects of trust on dealer relational behaviors under different interdependence structures

Interdependence structure Estimated effect size Standard error t-value Mean (S.D.),

relational behavioraMean (S.D.)

Trust

(1) Dealer dependence: low; supplier dependence: low 0.116 0.09 1.29b 4.60 (0.95) 4.65 (1.2)

(2) Dealer dependence: high; supplier dependence: high �0.013 0.115 �0.11 6.35 (0.55) 5.78 (1.2)

(3) Dealer dependence: high; supplier dependence: low 0.145 0.099 1.46b 6.03 (0.70) 5.00 (1.98)

(4) Dealer dependence: low; supplier dependence: high 0.228 0.089 2.56c 5.58 (1.5) 4.78 (2.17)

a All means and standard deviations are calculated after splitting the data into the four groups of interdependence structure.b pb0.1.c pb0.01 (one-tailed tests).


facilitate relational behaviors in symmetric dealer–supplier

dyads characterized by low interdependence, whereas in

highly interdependent dyads trust seems to be unrelated to

relational behaviors. In sharp contrast to H1b, the effect size

of trust decreases in symmetric dyads as total interdepend-

ence decreases.

H2 and H3 concern the role of trust in asymmetric dealer–

supplier dyads. It is posited in these hypotheses that trust in

the supplier will have stronger effects on dealer relational

behaviors as interdependence asymmetry increases, for both

more dependent dealers (H2) and less dependent dealers

(H3). The effect sizes of trust on dealer relational behaviors

are calculated for both asymmetry situations by substituting

the appropriate values for SDEP and DDEP in Eq. (3). As

shown in Table 3, the results suggest that the strongest

effect of trust occurs in asymmetric dealer–supplier dyads

where dealers perceive themselves as relatively less depend-

ent (more powerful) than their suppliers (dDRB/

dDTRST=0.23; pb0.01). Thus, H3 is supported; for power-

ful (less dependent) dealers in asymmetric dealer–supplier

dyads, trust has a stronger effect on relational behaviors than

for dealers in symmetric dyads. Similarly, the effect size of

trust for more dependent dealers in asymmetric dyads is

calculated as 0.14. This effect size is also in the expected

direction and (marginally) significant ( pb0.1), providing

support for H2. Thus, overall, in line with the expectations,

trust is found to have a significant positive effect on dealer

relational behaviors of both more dependent and less

dependent dealers in asymmetric dealer–supplier dyads.

3. Discussion

This study explores the variations in the effects of trust

on dealer relational behaviors toward supplier firms under

different interdependence structures. The study is con-

ducted in a long-term, contractual channel setting, where

firms representing both sides of the dealer–supplier dyads

have varying levels of economic and noneconomic

commitments to their channel partners. The long-term

nature of the empirical setting is theorized to have some

important bearings for and therefore should be taken into

account when deriving the theoretical and managerial

implications of the findings. Indeed, one major finding of

,

this research is that trust in and dependence on the

exchange partner may influence a channel firm’s relational

behaviors simultaneously (with dependence having a

relatively stronger effect), as indicated by the significant

bmain effectsQ of both factors. It is further found that

variations in the level of trust exert the strongest positive

influence on dealer relational behaviors in asymmetric

channel dyads where dealers consider themselves relatively

less dependent (more powerful) than their suppliers. For

relatively more dependent dealers, trust is found to exert a

marginally significant positive effect. The estimated effect

size of trust in symmetrically but loosely interdependent

dealer–supplier dyads is also positive and marginally

significant. Most unexpectedly, however, variations in the

level of trust do not have a significant role in determining

dealer relational behaviors in symmetric dealer–supplier

dyads characterized by high levels of mutual (inter)

dependence. Note that extant research views a state of

high and symmetric interdependence as the most appro-

priate condition for trust to exist and to function. By

studying the role of trust in long-term channel relation-

ships, the study expands the state of knowledge in this area

substantially. Specifically, according to the results, there

exists an ample difference in long-term channel relation-

ships between the conditions under which trust is more

likely to exist and the conditions under which trust is more

functional (i.e., more effective in terms of promoting

relational behaviors).

Displayed in the last three numerical columns of Table 3

are the mean levels of trust and relational behaviors

observed in each interdependence condition. These figures

show that dealers in the sample that perceive their relation-

ships with suppliers as highly and symmetrically interde-

pendent have higher levels of trust and display more

relational behaviors toward their suppliers than dealers in

other dependence conditions. However, variations in the

level of trust in such highly interdependent dealer–supplier

dyads do not seem to foster or inhibit dealer relational

behaviors in a statistically significant way. Gambetta (1988)

states that firms may experience a tension in exchange

relationships between their needs (induced by the depend-

ence structure) and the beliefs or expectations that these

needs will be fulfilled (induced by the level of trust in the

partner). It appears that the extent of relational behaviors


displayed by the dealers in the high interdependence

condition is more sensitive to need-based, structural con-

siderations (i.e., interdependence) than to attitudinal ones

(i.e., trust). The high joint dependence nature of the

relationship, i.e., the belief that both the supplier and the

dealer cannot obtain needed resources from other sources,

seems to act as a prime factor attenuating dealer perceptions

of outcome uncertainties and motivating dealers to take

additional steps toward bearing the risks associated with

displaying further relationalism. As a result, while some

threshold level of trust might be necessary in such dealer–

supplier dyads to reduce the fear of exploitation and to

generate bonding forces, trust beyond certain levels appears

to be nonfunctional.

On the other hand, in loosely interdependent dyads,

while both the level of trust in the supplier and the extent

of relationalism diminish (see Table 3), the effect size of

trust on relational behaviors moves to the point of being

statistically and substantively significant. This latter finding

represents a gradual shift in dealers’ thought processes

from a need-based judgment state to considerations as to

whether the supplier will fulfill its exchange responsibil-

ities reliably and benevolently towards producing fair

outcomes for the dealer. The low interdependence con-

dition implies that both parties retain the options of

betrayal and exit. Because the dependence structure

diminishes in importance in such situations in terms of

impeding opportunistic tendencies, outcome uncertainties

are likely to become substantial. As a result, the expected

behaviors (i.e., the trustworthiness) of the partner become

critical for relational tendencies. Trust may work as a

perceptual assurance in such channel dyads, making the

relationship cognitively more tolerable and encouraging

partners to take risks. The low interdependence situation

also suggests that, when trust is lacking, costs of

monitoring the channel partner and the investments

required to guard against the partner’s opportunism may

well surpass the expected benefits from the relationship

(Lyons, Krachenberg, & Henke, 1990). Consequently,

firms in symmetric but loosely interdependent channel

relationships have much to gain if they develop and

implement policies aiming to obtain the trust of their

partners.

What, then, is the role of trust in fostering relational

behaviors in channel dyads characterized by asymmetric

interdependence? This study distinguishes between the

more dependent and less dependent members of asymmetric

dyads based on the expectation that different motivational

mechanisms are influential on the behavioral orientations of

firms in each side of the dyad. The findings indicate that

trust and relational behaviors are not uncommon in each of

the two forms of asymmetric interdependence situations (see

Table 3). More important, dealers in the sample are most

receptive to the perceived trustworthiness of their suppliers

when they consider themselves more powerful (less depend-

ent) than their partners. These results are consistent with

some recent works in the channels area which emphasize

that (1) binterdependence asymmetry does not, in and of

itself, inevitably result in the realization of exploitationQ(Geyskens et al., 1996, p. 308) and (2) power differences,

when managed constructively and in accordance with

principles of fairness, can lead to positive relational

outcomes (e.g., Geyskens et al., 1996, Kumar et al.,

1995b, Yilmaz, Sezen, & Kabadayi, 2004). The results also

provide indirect evidence that powerful firms in long-term

channel dyads are increasingly seeking their best interests in

developing constructive relationships with their channel

partners. Furthermore, because relational behaviors by the

powerful party are more of a voluntary nature (rather than of

necessity), level of trust becomes a critical factor for

determining what level of relational behaviors are to be

directed to which channel partners. This finding is

particularly important because prior research has generally

neglected to examine the effects of trust on the behavioral

orientations of powerful members of asymmetric channel

dyads. It appears that more dependent firms in asymmetric

channel dyads can indeed attain a relational orientation from

their powerful partners, provided that the powerful party

trusts the dependent firm.

The study reveals that trust may facilitate the relational

behaviors of more dependent members of asymmetric

channel dyads as well. Unlike their powerful counterparts,

however, the effect size of trust in this interdependence

structure is only marginally significant. This relatively

weaker effect of trust found for more dependent dealers

represents a major difficulty for presenting the implications

of the study findings in a coherent manner. While not

hypothesized explicitly, the expectation at the inception of

the study was that trust would have the strongest effect on

the relational behaviors of highly dependent dealers because

of the vulnerability felt by these dealers. However, it appears

that, while these dealers display some considerable level of

relational behaviors toward their suppliers (see Table 3), their

motivation to do so is based largely on calculative concerns

rather than the level of trust placed in the supplier. One

plausible explanation for this phenomenon may be based on

the fact that the suppliers in the present empirical setting

have several well-established monitoring procedures (elec-

tronic transfer of orders and other information, mail surveys

of end customers, customer feedback in web sites, frequent

after-sales contacts with customers, announced and unan-

nounced visits by boundary personnel, etc.), which enable

them to keep close track of dealer behaviors and performance

outcomes. Because of this high level of task and outcome

visibility and identifiability, manifest relationalism exhibited

by the dependent dealers in the sample are largely due to

fears of retaliatory punishment. As a result, a majority of

dealer relational behaviors in this interdependence condition

is in the form of passive adherence to the suppliers’ specific

demands (e.g., forced collaboration), where the level of trust

placed in the supplier does not come to sight as a prime

factor.


Overall, from a managerial standpoint, the present study

shows that both trust and interdependence play important

roles in developing a relational behavioral orientation in long-

term channel relationships. Because the impact of trust is

found to be also contingent on the interdependence structure,

marketing managers aspiring to develop a relational orienta-

tion with their channel partners should determine the

dependence level of each party before they decide upon the

extent of time and resources to be dedicated to trust building

programs. The interdependence structure could be evaluated

based on the importance (economic value) and irreplace-

ability of each party for the other one. Obviously, trust is most

difficult to develop and to maintain in channel dyads

characterized by highly asymmetric interdependence struc-

tures. Interestingly, however, trust appears to have (1) the

strongest effect on the relational behaviors of powerful

parties in such asymmetric dyads and (2) a substantively

and statistically significant effect on the relational behav-

iors of less powerful sides of the dyad. Therefore, firms in

asymmetric channel dyads, particularly less powerful sides,

should invest substantially in trust building and maintain-

ing to create an image of honesty, benevolence, credibility,

and competence. On the other hand, in symmetrically and

highly interdependent channel dyads, focusing exception-

ally on trust-based governance attempts may simply fail to

breed the desired relationalism from channel partners.

Parties in such dyads will display relationalism primarily

because of calculative, dependence-based concerns. Trust

may be much easier to develop in such highly and

symmetrically interdependent relationships, and it is indis-

putable that some level of trust is necessary for such

channel relationships to continue. However, according to

the study results, beyond a certain level of its existence, the

influence of trust on partner relational behaviors diminishes

fast to the point of nonsignificance in highly interdepend-

ent long-term channel dyads. Finally, the results suggest

that, in low and symmetric interdependence conditions,

both parties can benefit by implementing trust generating

actions and policies. Trust does exert positive effects on the

relational orientations of the parties in such dyads. Another

role of trust especially important for such low and

symmetric interdependence type relationships, where both

parties are replaceable and do not contribute substantially

to one another’s economic well-being, is that its existence

eliminates the burdens associated with monitoring the

channel partner and decreases the costs of guarding against

partner’s opportunism.

4. Limitations and future research directions

Several limitations of the study should be noted. As is

often the case, these limitations also highlight fruitful

avenues for further research. First, despite all the efforts

to include a comprehensive list of the major antecedents

of relational behaviors, the empirical model explains only

a limited portion of the observed variance in dealer

relational behaviors (19.3%). In fact, a closer investiga-

tion of the extant research on cooperative/constructive

type channel member behaviors should reveal that a

majority of the works in this area suffers from the same

problem. This brings in mind the possibility that the

theoretical approaches that predominate in the channels

area may somehow be incomplete, failing to encompass

some channel member motivational mechanisms critical

for relational behavioral orientations. For instance,

research about interpersonal cooperation (e.g., Yilmaz &

Hunt, 2001) suggest that (1) dimensions outside the focal

relationship (i.e., social, cultural, and structural factors),

(2) social learning and imitation (e.g., mimicking

behavior), and (3) aspects of the specific tasks undertaken

by each side of the dyad (e.g., task complexity, task

visibility/identifiability, task interdependence) may exert

distinct effects on relational tendencies. Additionally, this

study could not examine the role of contracts and

contractual obligations (e.g., Handfield & Bechtel, 2002;

Roxenhall & Ghauri, 2004) on channel member behaviors

due to lack of variability across the contracts in the

industry. Research is needed to determine the effects of

these factors in channel relationships.

Second, the data were collected from only one side of the

dealer–supplier dyads. Failure to examine dealer perspec-

tives and supplier perspectives simultaneously may repre-

sent an incomplete depiction of the relationships studied. In

addition, measuring dealer relational behaviors from the

supplier’s perspectives would have eliminated concerns

about the potential effects of same-source variance on the

results. It should be noted, however, that same source bias is

least likely to have a significant role in the study of

interaction effects.

Third, research is needed to assess the generalizability

of the results in different channel settings and cultural

contexts. Specifically, while the infrastructural aspects of

and business procedures in the automobile distribution

systems in Turkey are very similar to those in the U.S.

and Western Europe, questions of generalizability with

respect to cultural differences demand further verification.

5. Conclusion

In conclusion, the results of the present study provide

valuable insights as to whether and when trust may work

as a building block in long-term channel dyads. The study

reveals that the conditions under which trust-based

governance efforts will yield the desired channel member

behaviors are determined largely by the perceived inter-

dependence structure. Given the specific sampling context,

however, much research is needed to develop a compre-

hensive theory of the joint and interactive effects of trust

and (inter) dependence on relational behaviors in channel

systems.


Appendix A. Measurement scales

Scale items Factor

loadingaAlpha Variance

extracted

Composite

reliability

(1) Dealer relational behaviors 0.95 NA NA NA

(a) Flexibility 0.72 NA NA

We are flexible when dealing with the supplier.

We expect to make adjustments in dealing with the supplier to cope with

changing circumstances.

When some unexpected situation arises, we would rather work out a

new deal with the supplier than hold them to the original terms.

(b) Information exchange 0.83 NA NA

We provide any information that might help the supplier.

We provide information to the supplier frequently and informally, and

not according to a prespecified agreement.

We will provide proprietary information to the supplier if it can help.

We keep the supplier informed about events and changes that may

affect them.

(c) Solidarity 0.87 NA NA

When the supplier incurs problems, we try to help.

We share in the problems that arise in the course of dealing with

the supplier.

We are committed to improvements that may benefit relationships

with the supplier as a whole and not only to ourselves.

We do not mind making sacrifices in favor of the supplier.

(2) Dealer dependence 0.95 NA NA NA

(a) Supplier irreplaceability 0.86 NA NA

If we no longer represented this supplier, we could easily compensate for

the loss of income by switching to other suppliers (R).

It would be quite easy for us to find an adequate replacement for this

supplier (R).

If we no longer represented this supplier, our sales would suffer

dramatically despite all our efforts.

If we wanted to, we could switch to another supplier quite easily (R).

(b) Supplier importance 0.72 NA NA

The supplier is important to our business.

The supplier is crucial to our overall business performance.

It would be costly to lose the supplier.

This supplier’s products have a reputation of high quality.

Our success in this business is largely due to the marketing efforts of

this supplier.

(3) Perceived supplier dependence 0.95 NA NA NA

(a) Dealer irreplaceability 0.78 NA NA

If we no longer represented this supplier, the supplier could easily

compensate for the loss of income in our trading area by switching to

another dealer (R).

It would be quite easy for the supplier to find an adequate replacement for

us in our trading area (R).

If we no longer represented this supplier, their sales in our territory would

suffer dramatically.

The supplier could easily switch to another dealer in our trading area (R).

(b) Dealer importance 0.70 NA NA

We are important to this supplier.

We are a major outlet for the supplier’s products in our trading area.

We generate high sales volume for this supplier.

(4) Trust 0.95 0.71 0.95

This supplier:

Cannot be trusted at times (R). 0.59

Is perfectly honest and truthful. 0.80

Can be trusted completely. 0.87

Can be counted on to do what is right. 0.92

Appendix A (continued)

Scale items Factor

loadingaAlpha Variance

extracted

Composite

reliability

(4) Trust

This supplier:

Can be counted on to get the job done right. 0.78

Is always faithful. 0.92

Is a business partner that I have great confidence in. 0.93

Have high integrity. 0.87

(5) Dealer relationship specific investments 0.72 0.50 0.79

We have made significant investments in displays, trained salespeople, etc.

dedicated to our relationship with this supplier.

0.68

If we switched to a competing resource, we would lose a lot of the

investment we made in this resource.

0.56

We have invested substantially in personnel dedicated to this resource. 0.62

If we decided to stop working for this supplier, we would be wasting a lot

of knowledge regarding their method of operation.

0.92

(6) Perceived supplier relationship specific investments 0.70 0.52 0.76

This supplier has gone out of its way to link us with its business. 0.69

This supplier has tailored its procedures to meet our specific needs. 0.74

It would be difficult for the supplier to recoup its investment in us if they

switched to another dealer.

0.73

(7) Supplier role performance 0.95 NA NA NA

How does this supplier compares with alternatives on each of the below

criteria? (Anchors: Much Worse=1; Much Better=7).

Delivery speed

Delivery reliability

Product availability

Product/service quality

Technical support

After-sales Service

NA=not available because the construct is operationalized as a multidimensional composite index.

(R) denotes a reverse coded item.a Standardized factor loading obtained from the full measurement model.


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Documents

Joint and interactive effects of trust and (inter) dependence on relational behaviors in long-term channel dyads