Inter-firm Trust between Emerging Markets: Chinese Firms in Africa

Abstract

The rapid global expansion of marketers from one emerging market to another such as countries in Africa, Latin America, Central Asia, and the Middle East is dramatically changing the landscape of international business relationships. A leading example is Chinese firms in African countries. The element of trust is highlighted in such emerging market relationships that involve large investments from multiple constituents with diverging and sometimes conflicting objectives. Our study provides a broader, more encompassing macromarketing framework by investigating inter-firm trust between two emerging markets from an institutional perspective. Our study develops the inter-firm trust concept in the context of Chinese businesses in Africa on the bases of extant literature, field interviews, and observations focused mainly on three African countries (Ghana, Kenya and South Africa). Drawing from trust theory and institutional theory, our study reveals three dimensions for the inter-firm trust concept and both trustor and trustee factors influence the perception of Chinese businesses in Africa. Macromarketing and practical implications for building and managing inter-firm trust at a multi-level between emerging markets are also discussed.

African and Chinese Managerial Practices: A Cross-Cultural Comparison

“…In so doing, it contributes to the body of literature on Sino-African business management as well as the emerging literature on China's engagement in Africa and its implications for human capital development . The China-Africa inter-market partnership has been the most active transcontinental trade relationship of the last decade (Elliot et al . 2019;Syed, Metcalfe, Ali & Ekuma, 2018) .…”

“…Some recent works on the management of SMEs suggest that the proximity of the leader, that is, his family and his ethnicity, influence the rigidity of rules (Boukar & Soukiwai, 2015;Hansen, Langevang, Rutashobya & Urassa, 2017;Nkakleu, 2016) . Elliot, Zhu and Wang (2019), in their study on inter-firm trust between Chinese and Africans, concluded that African firms have a horizontal collectivist orientation (cultural model in which the individual sees himself/herself as a member of an internal group whose members are all alike), whereas Chinese firms have a vertical collectivist orientation (cultural model in which the individual sees himself as a member of an internal group differentiated by his/her status) . Westwood and Lok (2003) demonstrated the high centrality of work in China whose authoritarian culture influences the thinking and behaviour of business leaders (Su & Wright, 2012) .…”

The Curvilinear Role of Trust in Marketing Systems: Analysis of a Moderated-Mediation Model with Hierarchical Linear Modeling

“…For example, at the macro level, Baktir and Watson (2021) demonstrate that trust may enhance community well-being by reducing economic uncertainty and encouraging entrepreneurial activity. At the meso level, trust affects the likelihood that a foreign firm partners with a local firm in emerging markets (Elliot, Zhu, and Wang 2019). At the micro level, trust influences product perceptions and customer preferences (Pedersen et al 2022).…”

“…At the micro level, trust influences product perceptions and customer preferences (Pedersen et al 2022). Furthermore, antecedents of trust, such as whether a firm is state-owned or privately owned (a meso level input), occur at each level of the marketing system (Elliot, Zhu, and Wang 2019). Through trust, these system inputs can influence downstream outcomes at the macro, meso, and micro levels.…”

“…Trust, traditionally conceptualized “as existing when one party has confidence in an exchange partner's reliability and integrity” (Morgan and Hunt 1994, p. 23), usually exerts a positive influence in marketing systems and leads to a number of desirable outcomes such as enhancing community well-being (Baktir and Watson 2021). Furthermore, the macromarketing literature has developed a myriad of conceptual frameworks involving trust, in which marketing system inputs influence outcomes through trust at the macro, meso, and micro levels (e.g., Elliot, Zhu, and Wang 2019).…”