The Achilles' heel of an enduring relationship: Appropriation of rents between a manufacturer and its foreign distributor

A blind spot in the resource based view (RBV) of the firm is the rent appropriation process. The RBV argues that rents accrue directly to holders of competitive resources. In reality, the potential rents in an international partnership are up for grabs as they arise on both sides of the border. Dysfunctional acts may strain even the longest and most successful relationships. With this predisposition the literature focuses on opportunistic behavior in partner switching. Our study considers a more complex mechanism where satisfaction in expropriating rent drives partner switching likelihood. The notion of a time-tested stable relationship is a misnomer; vulnerability grows over time, as one or both partners gain bargaining power in an enduring relationship. Establishing significant credible commitment, not the eradication of opportunism, builds satisfactory cross-border relationships. The higher the stakes and the longer the relationship, the stronger is the satisfaction between the committed partners.