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.
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Notes
Although its population is 95% Han Chinese, China is culturally diverse in that it encompasses vast regional differences in customs, language, and history (Stening & Zhang, 2007; Tsui-Auch, 2005; Wang, 1996). Despite these differences, cultural values such as filial piety, emphasis on the family as the basic unit of society, and respect for authority are widely adhered to. Most Chinese share familiarity with ancient Chinese history, major festivals, the Confucian ideology, and a unified writing system. Because these are values and cultural references that non-Chinese do not share, it is reasonable to assume that two Chinese individuals will have more common ground on which to build a relationship than will a Chinese and a non-Chinese individual.
Research on social categorization has shown that, in addition to biased perceptions of cooperation and competence, in-group bias is associated with social attraction. Attraction toward in-group members is, however, depersonalized and focused on group prototypicality, as opposed to personal attraction rooted in individualized preferences and affect (e.g., Brewer & Gardner, 1996; Hogg & Hains, 1996; Hogg & Hardie, 1992). Our research focuses on interpersonal trust between two individuals already acquainted with each other: hence this trust is built on personalized rather than depersonalized attraction.
The association between cognition- and affect-based trust is likely to be stronger in some cultures than in others. For example, Chua et al. (2009) found that the two types of trust are more tightly intertwined in Chinese networks than in American networks. Despite this cultural variation, prior research has established that these two types of trust are inherently correlated, even in Western societies such as the US (McAllister, 1995) and UK (Johnson & Grayson, 2005).
The level and type of interpersonal trust between two senior executives from different firms might also be influenced by complex relationships with other members of the partner firm. The trust that one executive places in another might also be influenced by institutional factors such as the formal organizational setup and culture of the partner firm. Indeed, Zucker (1986) argued that institutional characteristics can promote the development of trust. These important factors are beyond the scope of this study. We assume that, at the senior level, executives’ trust in their counterparts hinges more on interpersonal dynamics than on interactions with lower-level members of the organization. We also assume that, over and above the institutional attributes of the partner firm, interpersonal trust is highly dependent on how a trustor perceives a trustee based on his/her experience. In this research, the focal variable that shapes interpersonal dynamics and hence trust is cultural similarity.
We excluded respondents who are Hai Gui (Chinese who have had significant international exposure via study or work abroad).
All firms in China are directly controlled by the jurisdiction of various government levels, ranging from central to local governments. We categorize firm ownership based on the manner in which transactions are coordinated and property rights are embodied.
The partners from Malaysia were Chinese-Malaysians.
We conducted a series of statistical power analyses with ten predictor variables (six control, three continuous, and one dummy), and examined whether our sample size is appropriate for an acceptable level of 80% power (at a 0.05 significance level) (Hair et al., 2010).
We thank an anonymous reviewer for this comment.
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Accepted by Mariko Sakakibara, Area Editor, 19 July 2011. This paper has been with the authors for three revisions.
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Jiang, C., Chua, R., Kotabe, M. et al. Effects of cultural ethnicity, firm size, and firm age on senior executives’ trust in their overseas business partners: Evidence from China. J Int Bus Stud 42, 1150–1173 (2011). https://doi.org/10.1057/jibs.2011.35
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DOI: https://doi.org/10.1057/jibs.2011.35