Article ID Journal Published Year Pages File Type
1017729 Journal of Business Research 2014 9 Pages PDF
Abstract

Extant literature suggests, but has not tested, explanations as to why the proposal of a complex contract, compared to a simple contract, may harm or foster a new business partner's trust. This paper uses qualitative interviews to confirm four explanations that the literature suggests and to identify an additional explanation that the literature has not considered. Then, the paper presents an experiment with scenarios in three countries to determine whether the explanations (mediators) prove relevant. Each of the explanations proved relevant in at least one of the countries. The findings demonstrate that (1) the mediators this paper tests are useful in explaining the effects of contract complexity on a partner's trust, and they suggest that (2) culture moderates how individuals interpret complex contracts and build trust. For future research, the mediation model this paper proposes provides a basis for detailed tests of relevant moderators.

Related Topics
Social Sciences and Humanities Business, Management and Accounting Business and International Management
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