| Interfirm relationships develop through the activities that firms undertake to effectively control their businesses. Using the business relationship activities from Cannon and Perreault (1999), trust and commitment from Leonidou, Katsikeas and Hadjimarcou (2002), and cultural distance from Kogut and Singh (1988), this dissertation explores the effect of cultural distance on business relationship activities, trust and commitment separately and their inter-relationships.; Cultural distance theory suggests that firms perceive greater difficulty in maintaining relationships with their partner as the cultural norms and values become more diverse. With these greater differences, firms spend more time insuring effective communication and promoting cooperation, lowering firms' perception of the relationship strength with their foreign partners.; Using a self-administered survey, U.S. manufacturing firms meeting eligibility requirements submitted their perceptions on the trust, commitment, and relationship activities for their largest domestic and foreign distributor. Culture distance is determined from the manufacturers' designation of a country location for their foreign distributor.; The dissertation investigates three hypotheses. The first explores the effect of cultural distance on relationship activities. The second studies the effect of cultural distance on trust and commitment, while the third examines the inter-relationship of trust and commitment with the relationship activities.; Data analyses indicate that cultural distance has a very limited effect on the relationship activities between firms, but a greater effect on the social constructs. An unexpected result is that under certain circumstances, a paradox exists in which perceptions of relationships are higher with greater cultural distance, counter to cultural distance theory. |
