Overcoming export manufacturers' dilemma in international expansion

Fang Wu, Rudolf R. Sinkovics, S. Tamer Cavusgil, Anthony S. Roath

Research output: Contribution to journalArticlepeer-review

Abstract

Learning and acquiring local market knowledge from foreign distributors are central to manufacturers' export market performance. Drawing from the resource-based view, we propose that manufacturers need to develop stronger local market competence while simultaneously minimizing the costs of distributor opportunism in order to compete successfully in the export market. Cultural distance and other barriers, however, may hinder the development of local market competence for the manufacturer while contributing to the occurrence of distributor opportunism. In order to overcome these barriers, we examine the impact of three alternative forms of manufacturer governance - trust, knowledge sharing, and contract-based relationship - in export channels. Findings suggest that all three governance mechanisms contribute to enhancing the manufacturer's competence to exploit local market opportunity. However, of the three, trust seems to be the only effective way to curtail distributor opportunism. © 2007 Academy of International Business. All rights reserved.
Original languageEnglish
Pages (from-to)283-302
Number of pages19
JournalJournal of International Business Studies
Volume38
Issue number2
DOIs
Publication statusPublished - Mar 2007

Keywords

  • Distributor opportunism
  • Export market performance
  • Local market competence
  • Manufacturer-foreign distributor relationship
  • Organizational capabilities

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