Effects of cultural ethnicity, firm size, and firm age on senior executives' trust in their overseas business partners: Evidence from China

• Published in: Journal of international business studies 2011-12, Vol.42 (9), p.1150-1173
• Main Authors: Jiang, Crystal X, Chua, Roy YJ, Kotabe, Masaaki, Murray, Janet Y
• Format: Article
• Language: English
• Subjects: Age; Business and Management; Business executives; Business partners; Business Strategy/Leadership; Business structures; China; Chinese culture; Cognition; Cognition & reasoning; Cognitive models; Cooperation; Correlation analysis; Culture; Ethnicity; Executives; Hypotheses; Influence; International Business; Investigations; Japanese culture; Management; Modeling; Organization; Partners; Psychological research; Senior management; Size of enterprise; Social psychology; Studies; Trust
• ISSN: 0047-2506; 1478-6990
• DOI: 10.1057/jibs.2011.35

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' affectbased 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.