Joint venture survival in China: the importance of tangible and intangible trust

Abstract

Purpose The purpose of this paper is to examine the relationship among joint venture survival in Sichuan and two types of trust: intangible trust and tangible trust. Intangible trust encapsulates the internal affective aspects of trust, whereas tangible trust captures the external and more easily visible willingness to commit resources to the partnership. Design/methodology/approach The primary data used in this research are based on surveys conducted in 2002-2003 of 274 foreign invested firms in Sichuan province and are from a follow-up investigation of firm survival in 2009. Findings The results show that both intangible trust and tangible trust are significant in predicting survival in joint ventures seven years into the future. In addition, the authors explore determinates of intangible and tangible trust. Management control had no impact on intangible trust, but it had a significant positive impact on tangible trust via the presence of a foreign general manager. Cultural distance had the expected negative effect on intangible trust, but an unanticipated positive influence on tangible trust. Originality/value The main contribution of this research is establishing a link between measures of trust taken in 2002 with a performance measure from 2009. Trust today, whether it is tangible or intangible, predicts performance in the future. The majority of prior research linked a current measure of trust with a current measure of performance, which blurs the trust and performance relationship, as it is likely that the relationship is reciprocal and higher levels of trust may be the result of good performance just as much as good performance is a result of higher levels of trust.

Strategic planning key factor in tangible–intangible results in microenterprises

“…According to Mia and Clarke (1999), the tangible and intangible results of companies are measured through financial and non-financial performance (Koch and Koch, 2018;Schimke and Brenner, 2014), respectively, both factors of business performance (Noordin et al, 2015). Financial performance is defined as the degree of tangible profit that has been obtained through the investment (ROI) (Mohan and Baruah, 2019;Satiman et al, 2015), which also measures the profitability obtained from the company's resources (ROE) (Alam and Brown, 2006;Ndlovu and Alagidede, 2018).…”

“…In this study, it was decided to use the organizational performance scale because it is one of the instruments that address two relevant factors for the analysis of the variables referring to intangible and intangible results, measured through financial and non-financial performance (Koch and Koch, 2018; Schimke and Brenner, 2014).…”

“…According to Mia and Clarke (1999), the tangible and intangible results of companies are measured through financial and non-financial performance (Koch and Koch, 2018; Schimke and Brenner, 2014), respectively, both factors of business performance (Noordin et al , 2015).…”

The influence of conflict with suppliers on retailers’ private label performance

“…Therefore, it may be desirable for future studies to explore the dynamics of managing relationships under varying PL types. Such research may be especially important in the context of Asia (Haryanto et al , 2019; Hendarsjah et al , 2019; Koch and Koch, 2018).…”

Local bias and performance of venture capital institutions: evidence from the Chinese venture capital market

“…Traditionally, quite a strong local bias has been observed in venture capital investment too. Because the foreign component of local bias can be influenced by cultural distance (Li et al , 2014) and political interference (Aabo et al , 2016; Rienda, Claver and Quer, 2018) [for instance, cultural distance may be significantly related to trust (Koch and Koch, 2018)], this paper thus only focuses on the domestic component of local bias.…”