Understanding distributor opportunism in a horizontal network

• We examine the impact of a focal distributor’s horizontal network on its opportunism toward its supplier.
• We investigate the effect of the horizontal network from the relational and structural dimensions.
• Competition intensity of the network promotes a focal distributor’s opportunism whereas cooperation intensity should curb it.
• A focal distributor's network centrality strengthens the effects of competition and cooperation intensity on its opportunism.
• Suppliers should consider and proactively manage the network factors in the governance of its distributors.

Much of the recent literature on distributor opportunism has focused on how to predict and control it from a dyadic perspective. As a distributor is embedded in a horizontal network with many other distributors serving the same supplier, that firm's opportunism may be affected not only by the dyadic relationship with its supplier but also by the network relationships. By moving beyond a dyadic view, this study examines how the relational and structural dimensions of a horizontal network can influence a focal distributor's opportunism toward the supplier. Specifically, regarding the relational aspect, the competition intensity in the network will promote distributor opportunism whereas cooperation intensity should curb it. On the structural level, a distributor's network centrality will be positively related to its opportunism toward the supplier and strengthen the positive effect of competition intensity and the negative effect of cooperation intensity. Our empirical results, which are based on a survey of 219 distributors in the automobile industry, support most of these hypotheses. We discuss the implications for theory and practice based on the findings herein.