The Influence of Institutional Distance on the Psychological Contract and Commitment in Exporter-Distributor Relationships: An Abstract

Abstract

This study investigates international marketing activities between firms at the relational level; specifically, how perceived institutional distance influences the relationship between the psychological contract and aspects of commitment in an exporting context. Scholars have explored exporter-distributor (E-D) relationships from various theoretical approaches, such as transaction cost economics, resource-based view, network theory, institutional theory and the behavioural paradigm (Samiee et al. 2014). Aykol and Leonidou (2018) suggested that the influence of institutional differences on the formation and management of E-D relationships warrants attention. Institutional distance i.e., the degree of dissimilarity in the institutional environment can create various difficulties in building successful relationships. It also creates complications within the socialisation aspects of E-D relationships (Miocevic 2016). Scholars have repeatedly asked for a richer understanding of how individuals interpret their institutional context, as there is a need for micro-level explanations of the role of institutions (Powell and Colyvas 2008). Inter-organisational relationships emerge and evolve via individual activities (Ring and Van de Ven 1994). Managerial perceptions are critical for the development of relationships with business partners (Griffith and Lusch 2007; Sousa and Bradley 2006). Drawing upon literature from social exchange theory (Homans 1958), mainly focusing on the psychological contract perspective (Rousseau 1995) and institutional theory (North 1990; Scott 1995) we investigate two key research questions. First, what influence cognitive managerial predispositions (in the form of psychological contracts) have relative to dimensions of commitment in the context of E-D relationships? Second, what is the influence of institutional distance on the relationship between cognitive managerial predispositions and dimensions of commitment? Data was obtained from an online survey of 127 New Zealand exporters and was analysed using PLS-SEM (Ringle et al. 2005). In contributing to the international business-to business marketing literature, this study highlights the influence of managerial predispositions in the form of a psychological contract on E-D relationships. Additionally, we demonstrate the boundary conditioning effect of institutional distance on micro-level relationships (single exporter-distributor). The results show the differentiating effect of the psychological contract on two dimensions of commitment (affective and calculative commitment). The findings also show the moderating influence of institutional distance on a psychological contract’s two separate relationships with commitment.