Article | Journal of International Business Studies | 2011

Effects of Cultural Ethnicity, Firm Size, and Firm Age on Senior Executives' Trust in Their Overseas Business Partners: Evidence from China

by Crystal Jiang, Roy Y.J. Chua, Masaaki Kotabe and Janet Murray

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 inter-cultural trust. Relative firm size has a stronger negative effect on executives' cognition-based trust if their partners were 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.

Keywords: Ethnicity Characteristics; Culture; Management Teams; Cognition and Thinking; Networks; Globalized Firms and Management; Partners and Partnerships; Business Growth and Maturation; Size; Trust; China;

Citation:

Jiang, Crystal, Roy Y.J. Chua, Masaaki Kotabe, and Janet Murray. "Effects of Cultural Ethnicity, Firm Size, and Firm Age on Senior Executives' Trust in Their Overseas Business Partners: Evidence from China." Journal of International Business Studies 42, no. 9 (2011): 1150–1173. (Equal Authorship Among All Authors.)