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

• Main Authors: Jiang, Crystal X., CHUA, Roy Y. J., Kotabe, Masaaki, Murray, Janet Y.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2011
• Subjects: trust; social identity theory; China; Asian Studies; Business; Organizational Behavior and Theory
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/3902; https://ink.library.smu.edu.sg/context/lkcsb_research/article/4901/viewcontent/Effect_cultural_ethnicity_pv.pdf
• Institution: Singapore Management University

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’ 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.