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The Two Sides of Cooperation in Export Relationships: When More is Not Better

Wednesday, 23 June 2021
10:00 to 11:00
Matthew Robson (Cardiff)
Virtual seminar

Speaker: Matthew Robson (Cardiff)
Virtual seminar by Marketing and International Business (MIB) Research Centre

Abstract: For the past quarter of a century, academics have told managers that cooperation between exporters and importers is a good thing. Just as well, we might think, as the exporter will often sign away exclusivity to an importing distributor in a particular foreign market. Yet, some studies have questioned the beneficial effects of exporter–importer cooperation by showing, without explaining, that it may not have a positive effect on performance. We contend that cooperation carries the genes of its own demise. We develop a model drawing insights from exchange theory and the dark-side perspective of social relationships, which we then test using two consecutive data collection efforts with French exporters. The results suggest the influence of cooperation on exporter market performance has an inverted U shape; at high levels, the effect of cooperation on performance fades and becomes negative. Further, this effect is indirect. Cooperation must first influence the importer’s behavior, via its specific investments, to improve the exporter’s market performance. Moreover, we find that lower levels of interdependence increase the effect of low to moderate levels of cooperation on importer’s specific investments, and that the effect of cooperation on investments is impervious to psychic distance. Our results caution that more cooperation with foreign distributors is not always better and can hurt export performance. Over 50% of the exporters in our sample had reached a level of cooperation with their foreign distributors that was associated with lower market performance. Thus, our recommendation to export managers is to remain mindful that foreign distributors are independent firms. Managers must refrain from interfering with sovereign decisions of their representatives.

Bio: Mat Robson is Professor of Marketing and International Management at Cardiff Business School. His research focuses on international, strategic, and relationship marketing. He has published in journals of international repute including Journal of International Business Studies, Journal of International Marketing, Journal of Marketing, Journal of World Business, and Organization Science. He is an Associate Editor for the Journal of International Marketing.