Trust and ISA performance in emerging markets in South East Europe

Abstract

In this study we explore the critical antecedents of trust in International Strategic Alliances (ISAs). Additionally, we examine the impact of the foreign partner’s trust towards the local partner on ISA performance. Our theoretical development is based on elements drawn from Social Exchange Theory and Transaction Cost Theory. Both theoretical and analytical triangulation strategies are incorporated into the research design in order to better understand the complexity of trust and ISA performance. We empirically examine 171 Greek firms with ISA participation. The results show the positive impact of (a) the favourable local partner reputation, (b) effective communication with the local partner, and (c) the negative impact of foreign partner’s perceived risk of local partner’s opportunistic behaviour, on the degree of trust in ISAs. We also confirm prior work and show the positive impact of the foreign partner’s trust on ISA performance. Furthermore, we investigate the moderating role of environmental hostility in the local market on the impact of the degree of foreign partner’s trust on ISA performance. Additionally, we discuss the strategic implications of the results for managers of transnational corporations and practitioners and provide suggestions for further research.

Keywords:

• International strategic alliances
• trust
• performance
• environmental hostility
• emerging markets

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data that support the findings of this study are available from the corresponding author, Dr. Nikolaos Sklavounos, upon reasonable request.

Additional information

Funding

Dr. Sklavounos and Prof. Hajidimitriou have received partial funding from the Special Account for Research Funds of University of Macedonia. Dr. Sklavounos and Dr. Rotsios have received partial funding from the American Farm School of Thessaloniki.

Notes on contributors

Nikolaos Sklavounos

Nikolaos Sklavounos is an Adjunct Lecturer at Perrotis College of the American Farm School, at the International Hellenic University and at Mediterranean College in Thessaloniki, Greece. He holds a Ph.D. in International Business from the University of Macedonia, Thessaloniki, Greece. His research appears in the European Journal of International Management, Journal of Strategy and Management, International Journal of Productivity and Performance Management, Eastern Journal of European Studies, Journal of Business Paradigms, Elsevier Procedia Economics and Finance, Springer Procedia in Business and Economics, East-West Journal of Economics and Business, Scientific Bulletin–Economic Sciences and in the proceedings of several international conferences. His academic interests include international business, international strategic alliances, strategic management, global marketing, exports and human capital.

Konstantinos Rotsios

Konstantinos Rotsios is the Dean of Undergraduate and Graduate Studies and the Chair of the International Business Department at Perrotis College of the American Farm School in Thessaloniki, Greece. He holds a Ph.D. in Business Administration from the University of Macedonia. His research appears in books published by Vernon Press Series in Economics, Miranda Press US and Springer, Cham. His articles have been published in the European Journal of International Management, Journal of Strategy and Management, Journal of Business Paradigms, Springer Procedia in Business and Economics, Elsevier Procedia Economics and Finance, Scientific Bulletin–Economic Sciences and in the proceedings of several international conferences. His academic interests include international business, knowledge management, food and beverage SMEs and exports.

Yannis Hajidimitriou

Yannis Hajidimitriou is Professor in International Business and Director of the Master's Program in International Business in the Department of Business Administration, University of Macedonia, Thessaloniki, Greece. He holds a Ph.D. in Economics from the State University of New York (SUNY) at Stony Brook, USA. His current research focuses on the importance and role of knowledge transfer and trust in international joint ventures and international strategic alliances. His research appears in the European Journal of International Management, Journal of Strategy and Management, Global Business and Organisational Excellence Journal, Journal of International Consumer Marketing, European Journal of Operational Research, European Business Review, Operations & Supply Chain Management, Eastern Journal of European Studies, Elsevier Procedia Economics and Finance, Springer Procedia in Business and Economics, WSEAS Transactions on Business and Economics, East-West Journal of Economics and Business, Scientific Bulletin–Economic Sciences, American Business Review and in the proceedings of several international conferences.