The impact of individualism on buyer–supplier relationship norms, trust and market performance: An analysis of data from Brazil and the U.S.A.

This study focuses on the impact of the cultural dimension of individualism, face-to-face communication and the effect of relational norms such as supplier involvement and trust on the market performance of buyer firms. We use the culture literature and social exchange theory to test hypotheses using a sample of Brazilian and US manufacturing firms. The data were analyzed using variance-based structural equation modeling, employing nonlinear partial least squares regression. Our findings indicate that individualism is negatively related to the involvement of suppliers in the production process but is not associated with trust in suppliers. In addition face-to-face communication seems to have a positive effect on supplier involvement and trust.

► We examine the impact of individualism on relational norms, trust and performance.
► We highlight the role of face to face communication in economic exchanges.
► We use a sample of Brazilian and U.S. buyer firms to test our hypotheses.
► We find that individualism is not associated with trust in suppliers.
► Face-to-face communication has a positive effect on supplier involvement and trust.