Strategic alliances in international distribution channels

59 (2006) 1094–1104
Journal of Business Research
Strategic alliances in international distribution channels☆

Rajiv Mehta a,⁎, Pia Polsa b, Jolanta Mazur c, Fan Xiucheng d, Alan J. Dubinsky e

a School of Management, New Jersey Institute of Technology, Newark, New Jersey, USAb Swedish School of Economics and Business Administration, Helsinki, Finland

c Warsaw School of EconomicsWarsaw, Polandd School of Management, Fudan UniversityShanghai, People's Republic of China

e Professor Emeritus of Consumer Sciences and Retailing, Purdue University, West Lafayette, Indiana, USA

Received 27 November 2003; accepted 5 July 2006

Abstract

Given the differing dynamics of managing a distribution channel system, can the extant research on international strategic alliances, whichlargely focuses on the manufacturer–supplier interface, be extended to the manufacturer–distribution channels context? Owing to the paucity ofresearch on strategic alliances in international distribution channels, this investigation seeks to verify empirically the effects of learningorientation, relationship longevity, and relationship closeness as determinants of cooperation, which, in turn, is an antecedent of performance, andrelationship satisfaction.

The research hypotheses were tested empirically on data drawn from a sample of manufacturing firms located in the United States (U.S.),Finland, the People's Republic of China (P.R.C.), and Poland. Although some similarities for fostering cooperation in international distributionalliances were detected on a cross-national basis, disparate emphases on alliance management practices were observed as well.© 2006 Elsevier Inc. All rights reserved.

Keywords: Strategic alliances; Manufacturer–supplier interface; International distribution channels; Cooperation; Learning orientation; Closeness; Satisfaction;Performance

1. Introduction

With firms increasingly adopting long-term, flexible, relation-ship-oriented partnering arrangements as foreign market entrystrategies, international strategic alliances (ISAs) have becomecommonplace. However, an examination of the extant literaturereveals that there is a paucity of research focusing on ISAs bet-ween manufacturers and their distribution chains. Thus, aninteresting, yet unexplored, question is whether the knowledgegained in the analysis of ISAs in the manufacturer–supplierinterface, which has sustained considerable attention, can beapplied to managing the alliance relationships between manu-facturers and their international distribution channel partners.The answer to this question is essentially unknown, as no knownstudies have examined the issues of managing strategic inter-

☆ We are grateful to the National Science Foundation of China (Grant No.70532006 and 70572083), which, in part, supported this study.⁎ Corresponding author. Tel.: +1 973 596 6419.E-mail address: [email protected] (R. Mehta).

0148-2963/$ - see front matter © 2006 Elsevier Inc. All rights reserved.doi:10.1016/j.jbusres.2006.07.003

national distribution channel alliance partners that are located inmultiple countries from the perspectives of manufacturers.

The success of ISAs–often referred to as inter-firm collabora-tive arrangements–is largely predicated on a key characteristic: thedegree of cooperation that is fostered between coalition partners(Contractor and Lorange, 1988, 2002). The same phenomenonseemingly applies in cross-national collaborative inter-firmagreements between manufacturers and their internationaldistribution channel partners (Johansson, 2003). Therefore, toaddress the foregoing question, a studywas conducted focusing onkey antecedents and consequences of cooperation between amanufacturer and its international distributors. The researchhypotheses are tested using data drawn from a sample of manu-facturing firms located in theU.S., Finland, the P.R.C., and Poland.

2. International strategic alliances

Over the past two decades, the landscape of the internationalbusiness environment has undergone substantial change. ISAsand other inter-firm collaborative strategies have permeated

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1095R. Mehta et al. / Journal of Business Research 59 (2006) 1094–1104

global trade. Further, as evidenced by the proliferation of theliterature, researchers have documented the nature of ISAs andregarded it as an efficient mode of foreign market entryparticularly owing to its ability to cement cooperative agreementswith suppliers, distributors, and even their competitors (Bleekeand Ernst, 1991; Ploetner and Ehret, 2006). Companies are likelyto employ ISAs because of the difficulty of operating alone whileconcurrently excelling at performing the plethora of internationalbusiness functions. Accordingly, Ohmae (1989) avers that firmsshould forge close, collaborative, long-term, relationship-orient-ed strategic-partnering arrangements in which organizationscooperate with one another to create win–win situations globally(Hamel et al., 1989).

An ISA can be defined as ‘relatively enduring inter-firm coop-erative arrangements, involving cross-border flows and linkagesthat utilize resources and/or governance structures from autono-mous organizations headquartered in two or more countries, forthe joint accomplishment of individual goals linked to the cor-porate mission of each sponsoring firm’ (Parkhe, 1991, p. 581).Based on an extensive review of the literature, researchersgenerally aver that cooperation forms the heart of an ISA(Contractor and Lorange, 1988, 2002). In short, the partners of anISA cooperate to achieve objectives that each firm alone could noteasily attain (Casson and Buckley, 1988; Ploetner and Ehret,2006). The underlying goals for forging ISAs are, ultimately, toenhance both objective and subjective performance and effec-tiveness criteria such as sales growth, market share, net profits,and partner intrinsic relationship satisfaction—the focal outcomesinvestigated in this study.

3. Distribution channels

Distribution channels can be defined as the external contactualorganization that firms operate to achieve their distribution ob-jectives (Rosenbloom, 2004). Given enhanced domestic compe-tition and foreign market opportunities, an increasing number ofcompanies are looking outwards to international markets. Manydo so by opting for a direct exporting approach that relies oninternational distribution channel members to distribute theproduct in the host country. Instead of operating by using anarms-length relationship, firms cement ISAswith their distributionchannel members to make their products available to finalcustomers in the countries (Johansson, 2003). However, forgingdistribution channel partnerships presents a formidable challengebecause ISAs are usually not legally defined entities governed bystate, national, or international laws. Nor, in most cases, are theyeven formally structured organizations with clearly delineatedlines of authority and precise operating rules. Although such ISAsmay be reflected in a written partnership agreement between thechannel participants, the real foundation underlying the relation-ship is based on cooperation between partners (Mehta et al., 2001).

4. Cooperation

As in ISAs, the literature on distribution channels also has as itsfocus the need to build long-term relationships and the necessityof engendering cooperation among distribution alliance partners

(Mehta et al., 2001). In this study, cooperation is defined as‘similar or complementary coordinated actions taken by firms ininterdependent relationships to achieve mutual outcomes withexpected reciprocation over time’ (Anderson and Narus, 1990,p. 45). Conceptualizations of cooperation share the followingcommon elements: (1) cooperation requires interrelated behaviorby two or more parties; (2) such behavior is voluntary; and (3)cooperation is motivated by the desire to achieve both individualand joint objectives (Casson and Buckley, 1988).

Distribution channels are composed of interdependent institu-tions that must cooperate to perform distribution tasks whilesimultaneously pursuing independent and collective goals. Indeed,distribution channels cannot function without sustained coopera-tion in which each party knowswhat to expect from its counterpart(Mehta et al., 2001; Robicheaux and El-Ansary, 1976).

5. An integrative conceptual model of cooperation ininternational strategic distribution channel alliances

Because learning orientation, relationship longevity, and re-lationship closeness are the three features that constitute some ofthe major building blocks of ISAs, we sought to empiricallyascertain whether these factors are precursors of cooperation,which, in turn, is an antecedent of performance and relationshipsatisfaction. Additionally, performance is considered an anteced-ent of relationship satisfaction. The conceptual model (Fig. 1)depicts the putative relationships among the focal constructs,which were derived by synthesizing extant theoretical and em-pirical research on ISAs, and distribution channels.

5.1. Learning orientation

Learning is a key characteristic of ISAs (Crossan and Inkpen,1995; Hamel, 1991). To internalize interrelated alliance partnercore competencies into shared strategic advantage, coalitionpartners must learn from each other (Parkhe, 1991). Throughmutual learning, alliance partners can share their firms' exper-tise with other coalition members, thus solidifying and en-hancing the core competency of the overall alliance.

Representing a core dimension in organizational learning,learning orientation is conceptualized as the degree to which thefirm stresses the value of learning for the long-term benefits of thefirm (Hult and Ferrell, 1997). It reflects the attitude towardlearning in an organization—a predilection toward the ability,commitment, necessity, and value of learning (Sujan et al., 1994).Parkhe (1991) argues that interorganizational learning mitigatesthe impact of diversity in partnering, thus increasing the pos-sibility for cooperation among members. This phenomenon ismore apparent in ISAswhere learning occurs among partnerswhoare not competitors (Tseng, 1999), as is the case in distributionchannels. Conceivably, learning can foster cooperation amongpartners. Therefore:

H1. Higher levels of learning orientation will be positivelyassociated with higher levels of cooperation between themanufacturer and its international strategic distribution alliancepartner.

Fig. 1. A conceptual model of cooperation in international strategic distribution channel alliances.

1096 R. Mehta et al. / Journal of Business Research 59 (2006) 1094–1104

5.2. Relationship longevity

Implying continuous, not discrete, exchanges, longevity willvary from alliance to alliance. Relationship longevity is oftendefined as both the actual length of the relationship as well as theexpectation of continuing or a desire to continue the relationship(Barkema and Vermeulen, 1997; Heide and John, 1990; Moor-man et al., 1992). As a core characteristic of the definition of anISA, in this study, we focus on the longevity or actual duration ofan interfirm coalition.

The nature of how relationship longevity functions in inter-national distribution alliances is unknown. However, the bulk ofthe literature assumes that long-lasting relationships are profitableand beneficial. A variety of benefits of long-term relationshipshave been proposed, but few examined. Among the exceptions isa study by Kalwani and Narayandas (1995) which shows thatlongevity has a positive impact on net sales, costs, prices, andROI. Prior empirical work postulates that the longer the businessrelationship is, the more cooperative, trusting, and committed thecompanies will be through adaptations they make (Heide andJohn, 1990). Research on networking indicates that the longer thatpartners have known and the more they trust each other, the morewilling companies are to undertake adaptations (Ford, 1980).Discordant results on longevity is possibly explainable because inindustrial markets, a long-term commitment to a partnership mayrequire heavy investments and adaptations, which, in turn,increase dependence and create higher exit barriers, thus furtherfostering longevity. As such, conceivably the longer the inter-national distribution alliance relationships are, the more cooper-ative the partnerships will be. Therefore:

H2. Higher levels of relationship longevity will be positivelyassociated with higher levels of cooperation between themanufacturer and its international strategic distribution alliancepartner.

5.3. Relationship closeness

As an integral ISAs characteristic, the development of closerelationships and intimacy between buyers and sellers has beenthe subject of both theoretical (Ford and Rosson, 1982) andempirical work (Nielson, 1998). In the context of export channels,relationship closeness has been defined as relationalism (Belloet al., 2003). Alternatively, Noordewier et al. (1990) refer tocloseness as shared norms that include flexibility, informationexchange, and solidarity. Some studies interpret closeness ascontinuity of a relationship (Heide and John, 1990), and othersassume that long-term relationships are close ones (Ford, 1980).

We extend partially Pérez and Descals (1999, p. 36) notion ofcloseness as ‘the atmosphere or climate of the relationship’ in-stead of ‘the level or volume of interaction.’ Relationshipcloseness thus refers both to the general closeness of the firmsand to the closeness of working relationships to accomplishcommon partnership objectives. Consequently, close-workingrelationships developed between a manufacturer and its interna-tional distribution alliance partner conceivably will result in joint-striving, enhanced collaborative efforts, or heightened coopera-tion levels. Relationship closeness in buyer–seller relationshipshas been found to influence cooperation (Nielson, 1998).Therefore:

H3. Higher levels of relationship closeness will be positivelyassociated with higher levels of cooperation between the manu-facturer and its international strategic distribution alliance partner.

5.4. Performance

In the process of making products available to their targetmarkets, manufacturers have become increasingly reliant oninternational channel partners for the efficient and effectiveperformance of marketing functions (Aulakh and Kotabe, 1997).


Moreover, as international channel partners can significantlyinfluence a firm's success or failure in the long run,manufacturersshould be concerned about the performance their distributionchannel partners. In this study, performance is defined as thedegree to which the international distribution alliance partnerengages in behavior that contributes to the fulfillment of themanufacturer's objectives (Gaski and Nevin, 1985). Thisdefinition is compatible with Olk's (2002) partner optimizationapproach for assessing the performance of ISAs.

Robicheaux and El-Ansary (1976) assert that functional inter-dependence inherent in distribution channels requires cooperationin order to accomplish channel-related tasks.Without cooperationthe working relationship and, hence, the system will likelydisintegrate (Coughlan et al., 2006). Cooperation also refers to co-efforts in pursuit of common goals, which entails working to-gether to achieve goals that benefit all partners (Anderson andNarus, 1990). Hence, manufacturers and distribution channelpartners that strive jointly and coalesce to solve business problemsshould attain a high level of performance. Conceivably, manu-facturers that are able to elicit higher levels of cooperation fromtheir distribution partners will experience an increase in per-formance. Therefore:

H4. Higher levels of cooperation between the manufacturer andits international strategic distribution alliance partner will bepositively associated with higher levels of manufacturerperformance.

5.5. Relationship satisfaction

A key outcome of an interorganizational system is membersatisfaction (Anderson and Narus, 1990). According to Schulet al. (1985, p.13) satisfaction represents ‘channel membersaffective attitudes and feelings concerning the domain ofcharacteristics describing the internal environment of the channelorganization and relationships between the channel member andthe other institutions in the channel arrangement.’ As such, itrepresents a channel participant's assessment of four distinctfacets: satisfaction with channel administration, service support,rewards, and channel policies. Because a distribution channel is asocial system, when partners jointly strive together, sentimentslikely reveal partners' perceptions of the quality of the rela-tionship. Partner firms that tend to coalesce toward the attainmentof common goals may build stronger working relationships,which could increase relationship satisfaction with the partner-ship. Moreover, the intrinsic fulfillment attendant with achievingthe desired goals increases because this performance level mayproduce strong feelings of accomplishment and, in the process,generate higher levels of contentment and relationship satisfactionwith the distribution alliance partnership. Therefore:

H5. Higher levels of cooperation between the manufacturer andits international strategic distribution alliance partner will bepositively associated with higher levels of the manufacturer'srelationship satisfaction with the partner.

This study posits that manufacturer performance is an an-tecedent of relationship satisfaction with its alliance. Robicheaux

and El-Ansary (1976) argue that a member's performanceoutcomes will affect the member's satisfaction with its channelpartner. Moreover, Schul et al. (1985) found that a channelmember's perception of its past performance is a determinant ofsatisfaction with its channel relationships.

The foregoing findings imply that in international distributionalliances, partner firms may build stronger working relationshipsby mutually collaborating towards the pursuit and attainment ofcommon performance goals. Sentiments of fulfillment attendantwith achieving these desired performance outcomes mayengender feelings of achievement and, in the process, highersatisfaction with the distribution alliance outcomes that may bemanifest as well. Therefore:

H6. Higher levels ofmanufacturer performancewill be positivelyassociated with higher levels of manufacturer's relationshipsatisfaction with the international strategic distribution alliancepartner.

6. Method

6.1. Research setting

The sampling frame consisted of manufacturers that hadforged ISAs with their international distribution partners tomarket products in various foreign markets. In order to test theresearch hypotheses, data were drawn from manufacturerslocated in the U.S., Finland, P.R.C., and Poland. These fourcountries were selected for inclusion in the study because theyrepresent distinctly different cultures and economic orientations.The U.S. is indicative of a highly competitive, free enterpriseeconomy. Finland's economy is characterized as a welfare statewith high social benefits typically associated with many westernEuropean countries. Although a former Communist-bloccountry, Poland has transitioned to a free-market system; evenafter a half-century's history, though, it still manifests traces ofits former centrally-planned, command-based economy. Thepolitical leadership of the P.R.C. has been using directives togradually transition the country's economy from a communist-based, centrally-planned economy to one governed by freemarket forces (Yergin and Stanislaw, 2002).

6.2. Instrument development and equivalency checks

Developed in collaboration with several members of aninternational trade association, the self-administered question-naire sought information on international distribution channelmanagement practices from the perspectives of manufacturers.The questionnaire was pre-tested on key respondents from 20randomly selected members of the international trade associa-tion. Based on responses from the pre-test, minor editorialchanges were made to the survey.

When conducting cross-national empirical investigations,each version of the questionnaire must be tested for equivalencyand the construct terminology should be specific to the countrybeing studied. Consequently, the procedures suggested byBrislin (1970) were followed by first translating the Englishversion of the survey into Finnish, Chinese, and Polish. Then, to

Table 1Reliability estimates

Constructs Coefficient alphas

U.S.A. Finland Poland China

Learning orientation .93 .92 .94 .88Relationship closeness .85 .82 .88 .62Cooperation .94 .87 .89 .81Relationship satisfaction .92 .92 .87 .74Firm performance .84 .90 .78 .73

Table 3Inter-correlationsa for Finland sample

Variables 1 2 3 4 5 6

1. Learningorientation

1.00

2. Relationshipcloseness

.546(⁎⁎) 1.00

3. Cooperation .514(⁎⁎) .567(⁎⁎) 1.004. Relationshipsatisfaction

.547(⁎⁎) .750(⁎⁎) .639(⁎⁎) 1.00

5. Firmperformance

.593(⁎⁎) .607(⁎⁎) .701(⁎⁎) .712(⁎⁎) 1.00

6. Relationshiplongevity

.013 .200 .104 .256(⁎) .234(⁎) 1.00

a,⁎⁎ Pairwise correlation is significant at the 0.01 level (2-tailed).


ensure survey equivalency, the instruments were back translatedinto English (Sekaran, 1983). The back-translated instrumentwas then compared to the original to assess conformity.

Malhotra et al. (1996) and Sharma and Weather (2003) stressthe necessity of establishing the equivalence of scales and mea-sures used in cross-cultural research. First, functional equiva-lence recognizes the extent to which a construct has the samerole in different cultures. Second, conceptual equivalence ref-lects the degree of concordance in the way a construct isarticulated across countries. Third, instrument equivalencerefers to whether the items, response format, and questionnairestimuli are interpreted identically across cultures. Fourth,measurement equivalence discerns whether the scale items tapthe underlying construct similarly across cultures. The presentinvestigation followed these prescriptions, hence complyingwith the methodological dictum that has been proposed in thecross-cultural literature.

6.3. Construct operationalizations

Extant multi-item scales, whose psychometric properties havebeen previously established with adequate reported reliability andvalidity, were utilized to operationalize the focal constructs. Priorto analyzing the data, the composite for all multi-item constructswas derived by calculating the average of the raw scores of a givenconstruct's items.

Learning orientation was operationalized from a scaledeveloped by Hult and Ferrell (1997). Items reflect the degreeto which the manufacturer and the international channel partnerview learning from one another as central to their partnership

Table 2Inter-correlationsa for U.S.A. sample



1.00


.483(⁎⁎) 1.00


.407(⁎⁎) .747(⁎⁎) .627(⁎⁎) 1.00

5. Firmperformance

.645(⁎⁎) .695(⁎⁎) .852(⁎⁎) .681(⁎⁎) 1.00


−.027 .110 .031 .249(⁎⁎) .164 1.00


arrangement. The response format for these scales ranged from‘Strongly Disagree’ (1) to ‘Strongly Agree’ (5).

Relationship closeness was assessed by adapting scales thatwere developed by Nielson (1998). These items reflect the degreeto which a manufacturer has established extensive close workingrelationships with its most important international distributionpartner. Respondents were asked to rate the level of closeness ofthe relationship between the firm and its strategic internationalchannel partner using a ‘Strongly Disagree’ (1) to ‘StronglyAgree’ (5) response format.

Consistent with Barkema and Vermeulen (1997), relationshiplongevity was operationalized by asking respondents the ap-proximate length of time the company had maintained an on-going relationship with the firm's primary international partner.

Cooperation was measured by adapting a scale that wasoriginally developed by Childers et al. (1984). The scale reflectsthe degree to which a manufacturer perceives that its keystrategic international channel partner jointly-strives to attainindividual or mutual goals. The response format for these itemsranged from ‘Strongly Disagree’ (1) to ‘Strongly Agree’ (5).

Relationship satisfaction was operationalized by adapting ascale that has been employed in an international context byCullen, Johnson, and Sakano (1995). Respondents were asked torate the level of satisfaction with the relationship between theirfirm and its principal strategic international channel partner. Theresponse format for these items was anchored between ‘StronglyDisagree’ (1) to ‘Strongly Agree’ (5).

Following Aulakh et al. (1996), a three-item perceptualmeasure of firm performance was used; it asked respondents torate the impact their partnership with the primary internationalchannel partner had on their company's performance in terms ofsales growth, market share, and net profits. Each dimension ofperformance was assessed on a five-point scale that ranged from‘Very Low’ (1) to ‘Very High’ (5).

6.4. Respondents

The survey elicited data from key respondents on internationalchannel management practices from the perspectives of exportingfirms. Key informants, whose perceptions have been consideredreliable and valid (Schwenk, 1985), should be knowledgeable

Table 4Inter-correlationsa for Poland sample



1.00


.476(⁎⁎) 1.00

3. Cooperation .501(⁎⁎) .542(⁎⁎) 1.004. Relationship

satisfaction.549(⁎⁎) .673(⁎⁎) .720(⁎⁎) 1.00

5. Firmperformance

.583(⁎⁎) .673(⁎⁎) .517(⁎⁎) .562(⁎⁎) 1.00


.112 .064 − .057 − .042 .305(⁎) 1.00


Table 5Inter-correlationsa for China sample



1.00


.537(⁎⁎) 1.00


.483(⁎⁎) .471(⁎⁎) .546(⁎⁎) 1.00

5. Firmperformance

.284(⁎⁎) .391(⁎⁎) .328(⁎⁎) .319(⁎⁎) 1.00


− .152 .016 − .038 − .061 − .016 1.00



about management issues pertaining to the ISAs that their firmhad cemented with their primary (most important) internationaldistribution channel partners. Thus, the suitability of using asingle key informant method to provide reliable data wasaddressed as survey participants were all upper-level managersthat included the president, vice president of exports, although thebulk of the respondents were export managers. In the surveyguidelines, key informants were instructed to provide informationon demographic characteristics as well as various managementissues with reference to their primary strategic internationalchannel partner. The key respondents from the U.S., Finnish,Chinese, and Polish samples indicated that their manufacturingfirm's primary strategic international distribution channel partnerwas located in 53 different countries.

6.5. Data collection procedures

In the U.S. and Finland, the survey was administered usingessentially similar multi-step procedures. In the first stage, apacket containing a cover letter, the survey, and a pre-addressed,postage-paid reply envelope was mailed to all study participants.In the second phase of the data collection procedure, a follow-upletter was mailed a week later that reminded the survey recipientsto complete and return the survey within the pre-specified period.

In the P.R.C. and Poland, a different data collection processwas employed. In countries where there is a general mistrust ofdata-gathering techniques, as well as a lack of understanding ofcontemporary marketing research methods, Jain (1993) suggestsemploying alternative data-gathering procedures. Because thesecharacteristics are manifest in the P.R.C. and Poland, the studywas not administered by mail in these two locations. Con-sequently, data were collected by research assistants whoconducted personal interviews with key respondents of firmsthat had agreed to participate in the study. In all cases, the surveyrespondents completed and returned the questionnaire to therespective assistant.

6.6. Sample and response rate

In the U.S., a random sample of 480 manufacturers that hadforged ISAs with foreign channel members (distributors,

dealers, and importing agents) was drawn from databases of anationally known international trade association. Of the surveysmailed to the key respondents of these firms, 149 usablequestionnaires were returned within the specified period,yielding a response rate of 31.0%. In Finland, a similar data-gathering process was employed, with the exception that thesurveys were mailed to key respondents in a random sample of522 exporting firms drawn from a registry of exporters. A totalof 99 usable responses were received, for an effective responserate of 19.92%. In Poland, 100 randomly selected exportingfirms located in the suburbs of a major metropolitan city wereasked to participate in the investigation. Usable surveys werereceived from 63 firms, constituting an effective response rateof 63%. In the P.R.C., 100 randomly selected exporters locatedin a major industrial development zone were asked to participatein the study. Usable questionnaires were received from 93 firms,representing an effective response rate of 93%.

6.7. Data analysis procedures

Data were analyzed using path analysis to test the sixresearch hypotheses. To be compatible with research practicesin multi-country empirical investigations (e.g., Douglasand Craig, 1999), separate path analyses were computed forthe U.S., Finnish, P.R.C, and Polish samples. Because this studyseeks to identify which relationships among the focal constructsare especially strong in each country, standardized betacoefficients were examined (Hair et al., 2005).

6.8. Assessment of internal consistency and multicollinearity

Alpha coefficients (Cronbach, 1951) were computed to assessthe internal consistency of the multi-item scales used in this study.The alphas reported in Table 1 suggest that the multi-itemmeasures used in this investigation exhibit adequate reliability(Nunnally, 1978).

Although the correlation coefficients among the studyvariables across the four countries are portrayed in Tables 2–5,multicollinearity was assessed by computing variance inflationfactors (VIF)—a frequently used indicator of interdependencyamong predictor variables. The VIF values (see Tables 6–8) are

Table 6Regression results for cooperation

Sample Criterion Predictors Standardized beta coefficient t VIF Overall F p Adj R2

U.S.A. Cooperation a Learning orientation .358 5.415⁎ 1.30 54.85 .00 .53Relationship closeness .502 7567⁎ 1.31Relationship longevity − .018 − .309 1.01

Finland Cooperation a Learning orientation .235 2.328⁎ 1.48 18.43 .00 .36Relationship closeness .455 4.425⁎ 1.53Relationship longevity − .020 − .234 1.04

Poland Cooperation a Learning orientation .3279 2.80⁎ 1.30 12.25 .00 .35Relationship closeness .394 3.39⁎ 1.29Relationship longevity − .11 −1.16 1.01

China Cooperation a Learning orientation .644 6.61⁎ 1.46 25.79 .00 .48Relationship closeness .117 1.22 1.43Relationship longevity .069 .84 1.03

⁎pb .05.a Results for testing themoderating effect of longevity on the cooperation/learning orientationand relationship closeness association: In theU.S., the interaction term betas

are pb .05; in Finland, the interaction term betas are pN .05; in Poland, the interaction term betas are pN .05; and, in the P.R.C., the interaction term betas are pN .05.


well below the 4.00 threshold. Thus, multicollinearity does notappear to be problematic (Hair et al., 2005).

7. Results

Before empirically testing the hypotheses, cooperation wasregressed across relationship closeness and learning orientationusing relationship longevity as a moderator variable for all foursamples. This test was conducted on the assumption that thestrength and direction of the inter-relationships among alliancemanagement perceptions such as learning orientation andcooperation could be influenced by the length of the relationship(longevity) between the principal and focal international channelpartner. Relationship longevity served as a statistically significantmoderator (as noted by the interaction effects) only in the U.S.sample (Jaccard et al., 1990). In the other three country samples,though, insignificant moderating effects were detected.

H1, H2, and H3 predicted that cooperation is positivelyassociated with learning orientation, longevity, and relationship

Table 7Regression results for firm performance

Sample Criterion Predictors Standardized b

U.S.A Firm performance Cooperation .677Learning orientation .167Relationship closeness .128Relationship longevity .132

Finland Firm performance Cooperation .416Learning orientation .140Relationship closeness .187Relationship longevity .122

Poland Firm performance Cooperation .359Learning orientation .153Relationship closeness .145Relationship longevity .136

China Firm performance Cooperation .207Learning orientation − .057Relationship closeness .184Relationship longevity − .086

⁎pb .05.

closeness, respectively. Thus, cooperation was regressed acrossthese three antecedents to test the hypotheses. All four modelswere significant ( pb .00) and explained between 35 and 53% ofthe variance in the criterion variable, cooperation.

In all four samples, the putative positive relationshipbetween learning orientation and cooperation was observed( pb .05), thus lending support for H1 (Table 6). The relationshipis especially strong in the Chinese sample (beta= .644) relativeto the U.S., Finnish, and Polish samples. H2 posited thatrelationship longevity is positively associated with cooperation.In none of the four samples, however, was this relationshipobserved ( pN .05). So, H2 is not supported. As expected, rela-tionship closeness is positively related ( pb .05) to cooperationin the U.S., Finland, and Poland; surprisingly, though, it isunrelated in the P.R.C. sample. Consequently, H3 receivesempirical support in three of the four samples.

H4 predicted that the higher the level of cooperation, thegreater the level of manufacturer performance. H4 receivedempirical support ( pb .05) in all four countries (Table 7). The

eta coefficient t VIF Overall F p Adj R2

11.63⁎ 2.22 85.59 .00 .791.39 1.591.27 1.871.35 1.014.44⁎ 1.85 30.85 .00 .561.59 1.671.79 1.861.16 1.052.52⁎ 1.62 23.01 .00 .581.67 1.471.39 1.541.08 1.032.45⁎ 2.00 5.80 .00 .19− .37 2.291.16 1.45− .83 1.04

Table 8Regression results for relationship satisfaction

Sample Criterion Predictors Standardized beta coefficient t VIF Overall F p Adj R2

U.S.A. Relationship satisfaction Cooperation .058 .49 2.89 36.75 .00 .57Firm performance .287 2.29⁎ 2.54Learning orientation − .049 − .66 1.72Relationship closeness .281 2.13⁎ 1.95Relationship longevity .153 1.48 1.10

Finland Relationship satisfaction Cooperation .263 2.94⁎ 2.27 39.24 .00 .67Firm performance .258 2.80⁎ 2.40Learning orientation − .061 5.44⁎ 1.81Relationship closeness .450 − .76 1.94Relationship longevity .081 1.29 1.10

Poland Relationship satisfaction Cooperation .333 3.26⁎ 1.68 21.41 .00 .62Firm performance .237 2.30⁎ 2.58Learning orientation .155 1.53 1.65Relationship closeness .275 2.96⁎ 2.05Relationship longevity − .069 − .80 1.20

China Relationship satisfaction Cooperation .342 2.72⁎ 2.06 11.04 .00 .36Firm performance .238 2.25⁎ 1.30Learning orientation .123 .92 2.29Relationship closeness .111 .86 1.65Relationship longevity − .037 − .40 1.05

⁎pb .05.


association is strongest in the U.S. sample (beta= .677) andweakest in the P.R.C. sample (beta= .207). Cooperationexplains between 19% and 79% of the variance in performanceacross the four samples.

Cooperation and performance are predicted to be positivelyrelated to partner relationship satisfaction—as posited in H5 andH6, respectively. As shown Table 8, H5 receives empiricalsupport in all countries except for the U.S. ( pN .05); thecooperation/satisfaction linkage tends to be particularly strongin the Polish sample (beta= .333). The positive performance/relationship satisfaction association is observed in all fourcountries ( pb .05), thus lending support to H6. The linkage isespecially strong in the U.S. (beta= .287) relative to the otherthree nations. The four models explain between 36 and 67% ofthe variance in manufacturer relationship satisfaction with theinternational distribution channel partner.

7.1. Non-hypothesized, unexpected findings

Results of the path analyses revealed a non-posited, un-expected, yet interesting association. Specifically, relationshipcloseness was found to be positively related to relation-ship satisfaction for the Finland and Poland samples, but not forthe U.S. and P.R.C. samples. Rather than having a direct effect onsatisfaction, closeness was expected to have an indirect impact.Conceivably, this implies closeness has a very strong effect incertain instances that may conduce to its being both a direct anddistal effect.

8. Discussion

The purpose of the present investigation was to examine keyantecedents and consequences of cooperation between manu-facturers in the U.S., Finland, Poland, and the P.R.C. and theirinternational strategic distribution channel alliance partners.

Specifically, three potential precursors of partner cooperationwere examined: learning orientation, relationship longevity, andrelationship closeness. Two prospective outcomes of coopera-tion–firm performance and relationship satisfaction–wereinvestigated, as well as the linkage between firm performanceand relationship satisfaction. To the best of our knowledge, nopublished work has explored these issues vis-à-vis ISAsbetween manufacturers and their distributors.

Most of the study's hypotheses received empirical support.Specifically, cooperation was observed to be partially a functionof a partner's learning orientation. This linkage was observed inall four samples, but was especially strong in China. As such, tothe extent that ISA partners in the U.S., Finland, Poland, and P.R.C. possess a genuine ability and commitment to learn,perceive the necessity of learning, and value learning, thegreater will be their efforts at engaging in reciprocity andcomparable or complementary coordinated activities in order toaccomplish mutual results. Through joint learning, manufac-turer/distribution partners are likely to share their respectivecompanies' expertise with each other (a manifestation of alearning orientation). Such collaborative endeavors seeminglyconduce to cooperation among the partners.

Perhaps the nature of a particular nation's economic ideology(Ralston et al., 1997) contributed to the finding that the learningorientation/cooperation association was especially strong inChina. A possible explanation for this finding could well beattributed to the official policy of the P.R.C. government. Itemphasizes learning ‘from theWest’ in order to assist the Chineseeconomy to progress slowly towards more of a capitalisticapproach. Chinese firms may well have adopted this approach oflearning ‘from the West,’ as was reported in a study of Sino–Singaporean joint ventures by Tseng (1999). All Chinese partnersexpressed their intention of learning from their joint venturepartnering experience. Thus, Chinese manufacturers, relative totheir other three national counterparts, are especially keen to learn


about business approaches with which they are not particularlyconversant.

Closeness was found to be positively related to cooperation inthe U.S., Finnish, and Polish sample, but unrelated in the Chinesesample. This implies that ISAmanufacturer/distribution partners intheU.S., Finland, andPoland that have closeworking relationshipsconceivably will engage in enhanced collaborative efforts. This isconsistent with empirical results obtained in a buyer–seller dyadcontext (Nielson, 1998). The failure to obtain a positive rela-tionship between relationship closeness and cooperation in P.R.C.may well suggest that P.R.C. manufacturers might still be waryabout developing strong affiliations with international partnersowing to the crypto characteristics of their conventional beliefs. Assuch, manufacturers in the P.R.C. may not feel the intimacy(closeness) in their international distribution alliance relationships,thus attenuating the closeness/cooperation linkage.

Longevity was found to be unrelated to partner cooperationacross the four countries. In essence, then, the duration of thealliance between ISA manufacturer/distribution partners in thefour countries examined apparently does not influence whetherthe partners seek to undertake mutually satisfying collaborativeactivities. A potential rationale for the unexpected result is thatlength of the association between an ISA producer and the dis-tributor does not enhance cooperation, per se. Rather, othervariables (such as learning orientation and relationship closeness)are more critical to strengthening the cooperation betweenmanufacturers and strategic partners. Simply because two partieshave been in an ISA for some time does not necessarily mean thatthey will exhibit cooperative behaviors. The length of therelationship could be the result of non-cooperative factors, suchas no feasible alternate partners, hesitancy to consider alternatepartners, desire to remain with the lesser of the known evils(partner), and inertia.

Cooperation was observed to be positively related tomanufacturer performance in all four samples. This seeminglyrobust result is compatible with previous empirical work (Mehtaet al., 1996). Evidently, then, to the extent that ISA manufacturer/distribution partners engage in mutually beneficial and collabo-rative efforts, pursue common goals, and coalesce to solvebusiness problems, manufacturer performance is augmented.

The relationship between cooperation and performance wasespecially strong in the U.S. vis-à-vis the other three samples.Conceivably, the result arises because the U.S. has tended tohave lengthy experience with ISAs relative to its other threecounterparts in this study (Contractor and Lorange, 1988; 2002;Parkhe, 1991). As a result, U.S. manufacturers may well be ableto perceive and understand the import of having cooperationwith its partners and the salubrious impact such cooperation canhave on manufacturer performance. Producers from the otherthree countries may be in the nascent stages of developing ISAsand thus are not yet keenly familiar with the significance thatcooperation can have on their performance.

Cooperation was observed to be positively associated with amanufacturer's satisfaction with its alliance relationship in all butthe U.S. sample. Essentially, then, when ISA manufacturer/distribution partners in Finland, Poland, and P.R.C. work togetherin compatible and complementary pursuits, the manufacturers are

more likely to have a favorable affect toward their relationshipwith their distribution counterparts than when the conversesituation prevails. The failure to obtain the foregoing finding inthe U.S. sample may be explained by at least two rationales. First,perhaps U.S. producers believe that cooperation is given; that is,cooperation in an ISA is a necessary, but insufficient condition forrelationship success, thus vitiating the cooperation/relationshipsatisfaction linkage in the U.S. sample. Additionally, manufac-turers in the U.S. may also be more performance oriented thanmanufacturers from the other three samples. If so, they may wellplace increased emphasis on enhanced revenue generation,market share, and net profits and less concern on their satisfactionwith alliance cooperation as an end result.

As expected, manufacturer performance was related torelationship satisfaction with its international distribution alliancein all four samples. To the best of our knowledge, the present workwas the first study to examine this relationship in the context ofcross-border alliances between manufacturers and their distribu-tion channel members. This result implies that the key means ofenhancing the manufacturer's relationship satisfaction is for ISAdistribution partners to critically focus on and achieve enhancedlevels of performance. Augmented manufacturer performanceseemingly enhances manufacturer satisfaction with the ISApartner relationship. Achieving desired performance outcomesmay engender feelings of success and, in the process, inducehigher satisfaction with the international distribution alliance.

8.1. Managerial implications

The results of this study offer several managerial implications.First, when selecting distributors as ISA partners, manufacturersshould select those that have a learning orientation. That is,distributors that are ready, willing, and keen to learn from their ISAcounterparts are likely to be especially good partners in the longrun. Second, ISA partners should seek to develop close relation-ships with their distribution members. Doing so may entailproducers' demonstrating to distributor partners the import ofexperiencing close associations between alliance partners, identi-fyingmeans of fostering partner closeness, and being ever vigilantfor impediments to closeness. Third, longevity of an alliance doesnot appear to be a significant determinant of cooperation. Thus, inan ISA, relationship longevity does not necessarily begetcooperation. Reasons for the long duration may be unrelated torelationship satisfaction and success (e.g., it may be due to inertia).While the length of a relationship is sometimes considered asuccess variable (Parkhe, 1991), a dissolution of the same rela-tionship may also indicate success (Hamel, 1991). Fourth, co-operation was observed to be generally positively associated withpartner performance and relationship satisfaction. Therefore,manufacturers that seek to establish ISAs with distributors shouldmake steadfast efforts to foster cooperation with them.

8.2. Limitations and future research

The study possesses certain weaknesses that are redolent offuture research efforts. First, the sample was comprised of onlyfour countries, two of which are essentially capitalistic and


economically strong (the U.S. and Finland) and two of which arechiefly transitioning from socialistic to more of a capitalisticnature and are still groping to be autarkies (Poland and P.R.C.).Future work should investigate other nations that exhibit amultiplicity of economic philosophies and stature. Second, themodel and constructs that were tested here were predicated onwork that was developed and tested chiefly in the West. Furtherempirical efforts should seek to develop models and constructsthat are pertinent to Occidental and other non-Western cultures.Third, the present endeavor examined solely three potentialpredictors of cooperation in ISAs and two outcomes of it.Subsequent research should be directed at considering alternateprecursors, consequences, moderators, and control variables ofISA relationships. Fourth, ISA research should consider therelationship between learning orientation and longevity in thedistribution context. Contradicting propositions and resultsregarding the influence of learning orientation to longevity andvisa versa (e.g., comparing Hamel (1991) vis-à-vis Parkhe(1991)) suggest the need for further studies to clarify the natureof this relationship. Finally, only perceptions of manufacturerswere considered in the present study. Apperceptions ofdistributors, along with different-source data, should also begathered to discern their views of the ISA with respect to themanufacturer/international distributor dyad.

Acknowledgements

The authors gratefully acknowledge the reviewers, editor,and associate editor for their valuable input and encouragementthroughout the review process.

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Strategic alliances in international distribution channels

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