Zhi Cao, Yuan Li*, Jayanth Jayaram, Yi Liu and Fabrice Lumineau
Journal of International Business Studies 49(2018)
Recommended reason
The existing literature is ambiguous on how exchange hazards influences interfirm governance. Drawing on institutional theory, this study revisited this relationship by examining the moderating effects of national culture. By meta-analyzing 167 articles, authors found support for the moderating effects of three facets of national culture: collectivism, power distance, and uncertainty avoidance. At the same time, authors discussed the implications of the findings for theory and practice.
About the author
Yuan Li: School of Economics and Management, professor. The main research directions are: strategic management, innovation management and entrepreneurship management.
uncertainty; contractual governance; relational governance; national culture; meta-analysis; exchange hazards
Brief introduction
The extent to which interfirm governance should be deployed is a key decision that firms make in managing their collaborative relationships. Extensive studies have investigated how exchange hazards—the vulnerabilities that firms face when engaging with exchange partners—influence the extent of interfirm governance. However, findings on the exchange hazards–interfirm governance relationship are mixed. To address this pattern of inconsistent findings, recent literature has suggested that this relationship could be context dependent and has investigated the boundary conditions of this relationship. However, the moderating effects of institutional factors have been overlooked, and meanwhile, national culture is an important aspect of informal institutions from the institution’s perspective, which moderates the exchange hazards–interfirm governance relationship by influencing the acceptance of specific interfirm governance mechanisms as legitimate ways to address exchange hazards.
To fill this gap, a meta-analysis was conducted to examine how exchange hazards–interfirm governance relationships are moderated by national culture, the commonly shared values and beliefs that distinguish people in one country from people in another country. In order to moderate the effects of national culture, three dimensions of national culture are recognized as key dimensions related to exchange hazards and/or interfirm governance, which is collectivism, power distance, and uncertainty avoidance respectively. Based on it, several hypothesis about how to affect the relationship between exchange hazards and relational governance are presented. Then, by meta-analyzing 167 articles involving 38,183 interfirm relationships in 35 countries, the results show that exchange hazards are positively related to both contractual and relational governance, but the mean effect size for each relationship was heterogeneous. Meanwhile, national culture is proved as an important factor explaining the inconsistent findings on the exchange hazards–interfirm governance relationship. Besides, robustness, endogeneity, and nonpublication bias were checked using several steps, and it was proved that all results are available upon request.
As for the theoretical contributions of this study, it contributes to the literature in three main ways: First, the study refines our understanding of the exchange hazards–interfirm governance relationship by quantitatively aggregating existing empirical studies. Second, our study furthers knowledge on the generalizability of the exchange hazards–interfirm governance relationship by examining its boundary conditions from a cultural perspective. Third, this study enhances our understanding of the role that national culture plays in interfirm governance. Our study has implications for managers in charge of inter-organizational relationships. Our findings show that the exchange hazards–interfirm governance relationship is moderated by national culture, and this relationship may reverse at different levels of cultural characteristics. In particular, the same culture may have different effects on the relationships between exchange hazards and different types of governance mechanisms. Thus, we encourage managers to first assess their national culture and then to use appropriate governance mechanisms to address the exchange hazards in interfirm cooperation.
