THE FLORIDA STATE UNIVERSITY COLLEGE OF BUSINESS

THE EFFECT OF INTERNET TECHNOLOGY IN THE EXPORTER-DISTRIBUTOR RELATIONSHIP

By DAVID B. KUHLMEIER

A Dissertation submitted to the Department of Marketing in partial fulfillment of the requirements for the degree of Doctor of Philosophy

Degree Awarded: Fall Semester, 2005

The members of the Committee approve the dissertation of David B. Kuhlmeier defended on October 03, 2005.

______________________________ Gary A. Knight Professor Directing Dissertation

______________________________ Lee Stepina Outside Committee Memeber

______________________________ Larry Giunipero Committee Member

______________________________ Charles Hofacker Committee Member

Approved:

________________________________________ Gary A. Knight, Chair, Department of Marketing

________________________________________ Joe Nosari, Dean, College of Business

The Office of Graduate Studies has verified and approved the above named committee members.

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This work is dedicated to the memory of my mother and father for the life and name they gave me; to my sister, Theresa C. Eggleston, for her unending support; but most of all, to my three gifts from God, Clayton, Thea, and Caroline.you three are my life. You never left me and I will never leave you. I love you all.

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ACKNOWLEDGEMENTS

I would like to specifically acknowledge the following people for their contribution to this dissertation and my doctoral education: Dr. Gary Knight for his friendship and mentorship; all my committee members for their guidance, patience and understanding; Dr. Dennis Cradit for his support throughout my Ph.D. quest; Dr. Tom DeWitt for his assistance in the structuring and the wording of my manuscript; and Ms. Scheri Martin for her administrative miracle-making. God bless you all.

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TABLE OF CONTENTS

List of Tables ...............................................................................................................................vii List of Figures ..............................................................................................................................viii Abstract ................................................................................................................................ix 1. INTRODUCTION ....................................................................................................................01 Chapter Introduction ........................................................................................................01 The Critical Relationship Between the International Firm and its Foreign Distributors ........................................................................................................02 The Nature of the Exporter-Distributor Relationship ........................................................03 The Internet ....................................................................................................................05 The Effect of the Internet on the Relationship Between the International Firm and its Foreign Distributors ............................................................................................07 Why This Study is Important/Motivation for the Dissertation ................................07 2. LITERATURE REVIEW AND HYPOTHESES ....................................................................09 Chapter Introduction ........................................................................................................09 Foundational Theory in International Business ........................................................09 Foundational Theory in the Relationship Between the Firm and its Distributors/Distribution Theory ................................................................................10 Foundational Theory in the Use of the Internet ........................................................12 Key Constructs and the Proposed Relationships Among Them ................................13 Use of Internet Technology ................................................................................15 Quality of Communication ................................................................................15 Quality of Relationship ................................................................................16 Distributor Motivation ................................................................................16 Distributor Performance ................................................................................17 Hypotheses Development ............................................................................................17 The Internet ........................................................................................................17 Summary ....................................................................................................................27 3. RESEARCH METHODOLOGY ............................................................................................28 Chapter Introduction ........................................................................................................28 Research Context ........................................................................................................28 Research Design ........................................................................................................29

Sample Characteristics ............................................................................................30 Response Rate and Sample Characteristics ....................................................................31 Measures ....................................................................................................................32 Use of Internet Technology ................................................................................33 Quality of Communication ................................................................................34 Quality of Relationship ................................................................................34 Distributor Motivation ................................................................................35 Distributor Performance ................................................................................36 Reliability and Validity Assessment ................................................................................36 Measurement Model Results ............................................................................................36 Hypothesis Testing ........................................................................................................41 Analysis Plan ........................................................................................................41 Summary ....................................................................................................................44 4. RESULTS ................................................................................................................................45 Chapter Introduction ........................................................................................................45 Principal Research Findings ............................................................................................45 Hypotheses Testing Results ............................................................................................46 Summary ....................................................................................................................50 5. DISCUSSION AND CONCLUSIONS ................................................................................51

Chapter Introduction ........................................................................................................51 The Effect of Internet Technology Use on the Quality of Communication ....................51 The Effect of Quality of Communication on Distributor Motivation ................................52 The Effect of Quality of Communication on the Quality of Relationship ....................53 The Effect of Quality of Relationship on Distributor Motivation ................................54 The Effect of Quality of Communication on Distributor Performance ....................55 The Effect of Distributor Motivation on Distributor Performance ................................56 The Effect of Quality of Relationship on Distributor Performance ................................57 Managerial Implications ............................................................................................58 Use of Internet Technology ................................................................................58 Quality of Communication ................................................................................58 Quality of Relationship ................................................................................59 Distributor Motivation ................................................................................59 Distributor Performance ................................................................................59 Limitations of the Dissertation ................................................................................61 Recommendations for Future Research ....................................................................62 APPENDIX ................................................................................................................................65 ....................................................................................................................76

REFERENCES

BIOGRAPHICAL SKETCH ........................................................................................................89

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LIST OF TABLES

1. Measurement Model Results: Model Fit, Internal Consistency, and Validity

....................37

2. Measurement Model Results: Standardized Measurement of Coefficients and (t-values) ....................................................................................................................38 3. Standardized Loading Coefficients for the Measurement Model ............................................43 4. Results of the Hypothesized Relationships ....................................................................43

5. Summary of Hypothesis Tests for the Theoretical Model of the Effect of Internet Technology on the Exporter Distributor Relationship ........................................................48

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LIST OF FIGURES

1. Hypothesized Relationships

............................................................................................42

2. Refined Structural Model of the Effect of Internet Technology on Distributor Performance ....................................................................................................................49

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ABSTRACT

The effect of Internet technology use on the relationship between U.S. exporters and their overseas distributors is investigated. This study examines the effects Internet technology may have on the quality of communication, the quality of relationship, the level of distributor motivation, and distributor performance. Results of a study of 261 exporting manufacturers from across the United States suggests that Internet technology has a positive effect on the quality of communication between exporters and distributors. However, for that increase in

communication quality to affect distributor performance, it must be mediated by either a) distributor motivation through cooperation in the relationship, or b) commitment in the relationship. Results also suggest that the role of trust in the exporter-distributor relationship may not be as vital as previously thought. These results are discussed with regard to their theoretical and practical implications.

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CHAPTER 1 INTRODUCTION

Chapter Introduction

The world economy has changed. At one time national economies could exist relatively independently of other economies due to barriers such as distance, time, culture, national domestic policies, and regulations. However, trade between nations has important direct and indirect effects on national economies. Not only does it facilitate the flow of goods and services, but it also diffuses culture and ideas around the world. Today these national economies are merging into one integrated and interdependent system commonly referred to as globalization. Although cross-border or international business has been present since the beginning of civilization, its growth and its consequent globalization can be attributed to five basic factors (Kotabe and Helsen, 2001). First, the saturation of the U.S. domestic market, which has forced U.S. firms to look overseas for market growth. Second, the increase in multinational corporate mergers and acquisitions that has, according to Kotabe and Helsen (2001), facilitated the diffusion of information, ideas, and investments. Third, the change in the global competition structure has resulted in the decline in the number of U.S. firms in the worlds top one hundred largest firms. Fourth, changes in the world political and economic structure, with the fall of the Soviet empire, the establishment of the European Union, and the signing of the North American Free Trade Agreement as examples. Lastly, and perhaps most relevant to this study, the

proliferation of the Internet and electronic commerce. The importance of international trade cannot be overstated. Even though larger, more

developed countries may have domestic sources from which to satisfy the needs of their consumers, smaller and lesser developed countries must depend on foreign sources of goods and services to satisfy all their needs. In general terms, the larger a countrys domestic economy, the

less dependent it will be on imports and exports relative to its gross domestic product (GDP). However, as proposed in David Ricardos Theory of Competitive Advantage, no country can efficiently produce all of the goods and services it needs and must therefore trade with other countries. In addition to trading with countries which can satisfy needs more efficiently, many countries, especially richer countries such as the United States, depend on foreign sources to satisfy the variety and quality of the goods and services they desire. Failure to join the global market will lead to loss of economic influence for a country, a decrease in the standard of living for its residents, and a loss of a driver for the creation of new and better paying jobs. As a result, approximately 20% of the worlds total economic activity, or $6.2 trillion, is merchandise exports (Griffin and Pustay, 2005). In the U.S., exports represent 13% of our gross domestic product (GDP). Quite simply, the business world, as we know it, cannot exist without trade.

The Critical Relationship Between the International Firm and its Foreign Distributors

As a means of global market entry, exporting represents the first method by which firms begin their involvement in international markets. Exporting not only provides a firm with a relatively inexpensive means of accessing foreign markets for its goods and services, but it also allows a firm to obtain valuable international experience and obtain needed economies. Although the majority of export sales to date are conducted through independent distributors, it is the function of the intermediaries, or middlemen in general that is important to smaller companies which may not have the resources or experience to represent themselves overseas. Overseas distribution via an intermediary does provide relatively inexpensive and immediate representation in a foreign market, but it comes at the cost of reduced control by the exporter because of its dependence on the foreign representative. Any foreign intermediary will provide service to both the market customers (i.e. demand side) and the exporting firm (i.e. supply side). For customers, an intermediary facilitates the search process by making the product/service available and adjusts the discrepancy of assortment between the manufacturer and the buyer by making the product or service available in the desired quantity. For the exporting firm, the intermediary routinizes the purchase transaction and reduces the number of contacts in the market (Coughlan et al., 2001). However, for the

exporting firm the specific distribution tasks or flows (Coughlan et al., 2001) that are to be performed in the market by the intermediary will be determined by the distribution objectives that have been set by the firm, which will differ somewhat according to whether a consumer or industrial market is being served. However, these tasks must be explicitly stated and can often include functions in the following areas: inventory, delivery, credit, emergency service, packaging, technical assistance, market information, advertising, order processing, and returns (Rosenbloom, 2004). The extent and importance of these functions only underscore the

dependence of the exporter on its intermediary, especially when these important functions are performed in a distant, challenging, and foreign environment. It therefore emphasizes the need for an exporter to develop a strong working relationship with its foreign distributor. For the purpose of this study, the term foreign distributor is an overseas agent of a U.S. based manufacturer. It could include titles such as agent, distributor, sales representative, etc. Thus the term foreign distributor will be used in a generic sense to refer to whatever entity has the responsibility for the sale of the product in the designated foreign market. Specifically, it

will refer to the exporters most important distributor for its most important product in its most important market. Also, whenever not specifically mentioned, the term distributor will refer to a foreign distributor since this study focuses on exporting.

The Nature of the Exporter-Distributor Relationship

With the increasing globalization of the business environment and the resultant need for firms to face competition in multiple markets has come a concomitant need for cross-border and inter-firm relationships. Indeed, more manufacturers are opting for overseas distribution

partnerships in order to obtain various benefits, including the avoidance of both tariff and nontariff barriers, accessing needed resources and complementary marketing skills, and overall reduction of the risks and costs that come with conducting business internationally (Kotabe and Swan, 1995). Through these relationships the US exporter can penetrate foreign markets and pursue growth that is not available domestically. However, such growth in sales or market is dependent on the performance of the overseas partner. Many exporters are very dependent on their channel intermediaries (Albaum et al., 1998; Root, 1994). Therefore the establishment and maintenance of a long-term relationship with their partner is important to the exporting firm.

The establishment and maintenance of this relationship is the responsibility of the firms management. In this context, the concept of relationship marketing pertains to Thorellis (1986) network paradigm, which proposes that more and more of global competition takes place between networks or alliances of firms. Morgan and Hunt (1994) refer to relationship marketing as all marketing activities directed toward establishing, developing and maintaining successful relational chain exchanges. The quality of such relationships, such as that of the exporter and its distributor, revolves around concepts such as trust, commitment, and cooperation. With all the differences between foreign markets, such as distance, time, culture, legal requirements, etc., and the very competitive and dynamic environment in which a distributor must work, it is easy to understand why the concept of trust is important in the exporterdistributor relationship. Among the many definitions of trust offered in the literature is that of McAllister (1995) who says that trust is the extent to which a person is confident in, and willing to act on the basis of the words, actions, and decisions of another. In organizational theory, Hosmer (1995) refers to trust as the reliance by one person, group, or firm upon a voluntarily accepted duty on the part of another person, group, or firm to recognize and protect the rights and interests of all others engaged in a joint endeavor or economic exchange. Both refer to the concepts of reliability and confidence in the other party. According to Doney and Cannon (1997), trust is not limited to individuals, but can also be developed between organizations or institutions (e.g. an exporting firm and its foreign distributor). To emphasize the importance of the trust construct, Sherman (1992) concluded that the lack of trust was the biggest stumbling block to the success of alliances. Closely related to trust in the literature is the construct of commitment, which has been defined by Moorman, Deshpande, and Zaltman (1993) as an enduring desire to maintain a valued relationship. In a relationship it amounts to the belief that the relationship is important enough to extend the effort to maintain it. The requirement of commitment is well recognized in the export literature due to the time and effort it takes to develop an overseas market. Both trust and commitment in a relationship require some degree of cooperation. According to Anderson and Narus (1990) cooperation can be considered as two parties working together toward a mutually beneficial goal. Van de Ven (1976) emphasizes this concept by

referring to the goal of any inter-organizational relationship as the attainment of goals that are unachievable by organizations independently. Clearly, for smaller firms that cannot afford to represent themselves overseas, support and involvement of a local entity that is experienced in the market is essential for successful export performance. This study also analyzes other constructs that are closely related in the exporterdistributor relationship and have important interactions with it. Communication has been described by Mohr and Nevin (1990) as the glue that holds together a channel of distribution, and consequently is considered in this study to be of paramount importance. Foreign market distributors basically serve as the sales representatives for an exporter. In any sales situation, it is one of managements major responsibilities to motivate its sales staff to achieve established objectives and goals. Therefore motivation, which is defined by

Greenberg and Baron (1993) as the set of processes that arouse, direct, and maintain human behavior toward attaining a goal, is also analyzed in the exporter-distributor relationship. Finally, since profit is one of the major goals of any commercial firm, the construct of performance toward that goal would be relevant to any study dealing with relationship marketing. Although a term of basic importance such as performance can be defined in many different ways, Wheelen and Hungar (2000) offer the simple definition that performance is the end result of activity. However, in a profit-oriented relationship, that activity must be able to provide value toward the goals of the relationship. Clearly an exporter depends upon the performance of its distributor for delivering value to its respective market.

The Internet

Few can doubt the impact that the Internet, as a global computer network of interconnected networks, has had on humankind. In 2002, 531 million people in the world had access to the Internet (Strauss et al, 2003). This represents approximately 8.5% of the global population. Of that figure, developed nations, i.e. the nations that conduct most of the worlds trade, accounted for 88% of all Internet users. The United States claims to have the largest Internet usage with 182 million users, or 64% of its population. Although these may be

impressive figures, the availability of the Internet is even more prevalent in businesses, because a

higher proportion of businesses are connected to the Internet than are individual consumers around the world. While the reduction of trade barriers has made it easier for companies to conduct international business, advances in communication technology, such as the Internet, have made it easier still. By 2008, business-to-business (B2B) sales over the Internet in the U.S. are expected to reach $1,334B, an approximate 84% increase from what is currently conducted. As for online retail sales, the amount is expected to reach $230B, a projected 53% increase from 2004. Indeed few can argue that the Internet has had a tremendous worldwide impact upon business. The Internet has had immediate and far-reaching effects on International Business. In a business-to-consumer reference that would apply equally in a business-to-business context, Quelch and Klein (1996) state that any company that creates its own website could be considered as a multinational company. Knight and Cavusgil (2004) accurately describe born-global

firms that are internationally oriented from their inception due to their technological expertise. Saimee (1998b), while offering legitimate caveats and pointing out possible constraints, acknowledges that the Internet, as a component of export marketing plans, can be used as a valuable business process tool and can lead to revenue enhancement. The Internet, in terms of traffic, is doubling approximately every 100 days. While it took the radio 38 years to diffuse to 50 million users, the telephone 25 years, and the television 13 years, it took the World Wide Web a mere 4 years to reach that level of use (Antonette, Giunipero, and Sawchuk, 2002). This type of effect has led Dickson (2000) to describe the Internet as a super innovation, which are distinguished from other technological innovations in that they increase the speed, efficiency, and effectiveness of the transmission of new ideas and technologies (Diamond, 1998). In the approximately 15 years of its commercial existence, the Internet, as a global network of interconnected networks, has transformed how marketing and business itself is conducted. It has effectively overcome the problems of time and distance and has created opportunities that did not previously exist. For the exporter, the Internet has

increased access to markets, provided an open 24 hour-a-day forum of communication, and increased the efficiency of markets by facilitating the relationship between the exporter and its foreign distributor.

The Effect of the Internet on the Relationship Between the International Firm and its Foreign Distributors

According to Mick and Fournier (1998), technology presents many paradoxes for its users, such as causing both positive and negative feelings. In line with that thinking, Houghton and Winklhofer (2004) concluded that the Internet has the capability to have both constructive and destructive influence on channel relationships. Although many believed that the advent of electronic commerce would lead to drastic changes in the supply chain, those changes have not been the changes that were anticipated. Instead of the dis-intermediation or the elimination of the middleman (e.g. Jevons and Gabbott, 2000; Webb, 2002), Narayandas, Caravella, and Deighton (2002) have found that the buyer-distributor-seller relationship is still important and has not been supplanted by a direct buyer-seller relationship. In fact, Hamill and Gregory

(1997) state that a Net connection can "substantially improve communications with existing foreign customers, suppliers, agents and distributors, identify new customers and distributors, and generate a wealth of information on market trends and on the latest technology and research and technical developments". Contrary to what was feared, Boyle (2001) found that the Internet actually causes firms to become closer with their distributors due to the communication efficiencies provided by such technology. Among the advantages that firms can gain from the Internet in their relationship with partners are a global scope and reach, convenience, speed, efficiency and flexibility of information processing, improved data-base and relationship management, and lower sales and distribution costs. For the purposes of this study, it is therefore necessary to distinguish between the use of the Internet as a means of e-commerce transactions that could indeed alienate an intermediary, and the use of the Internet as a marketing communications tool that would enable an exporter to communicate more efficiently with its distributor.

Why This Study is Important/Motivation for the Dissertation

Despite widespread recognition of the globalization of the world economy, the ubiquity of the Internet, and the importance of relationship marketing in the supply chain, relatively little

research has been conducted in how these three domains affect each other. Fewer studies have involved empirical testing. Individually, the beneficial effects of global business, information/communication technology, and supply chain management are well documented. However, with the growing competition in the global marketplace, the instrumental role of interfirm relationships and networks, and the increasing power that Internet technology provides, the interaction of these three areas in global business is too important and pervasive to be ignored. Therefore, this dissertation examines the effect that the use of Internet technology has in todays exporterdistributor relationship. Although Internet technology is actually a continuum ranging from email to more complex data exchange and video conferencing capabilities, this study focuses on the extent to which exporters use Internet technology in general. The remainder of this proposal is composed of the following chapters. Chapter Two includes a review of relevant literature as it pertains to international business, interfirm relationships including the exporter-distributor relationship, communication, use of Internet technology in business, the motivation of distributors, and distributor performance. Also

incorporated into Chapter Two are the studys model and proposed hypothetical relationships between the constructs of interest: Use of Internet Technology, Quality of Communication, Quality of Relationship, Distributor Motivation, and Distributor Performance. Chapter Three will discuss the methodology and data analysis used in this study. Finally, Chapter 4 will discuss the conclusions and implications of the study.

CHAPTER 2 LITERATURE REVIEW AND HYPOTHESES

Chapter Introduction

The purpose of this chapter is to present an overview of the research streams under investigation in this dissertation. The areas of communication, distributor relationships, motivation, and performance are discussed in the context of the use of Internet technology in international business, specifically exporting. Hypothesized relationships between these

constructs are then presented, with Internet technology serving an antecedent role.

Foundational Theory in International Business

Original efforts to explain why trade occurs were nation-oriented. These country-based theories included mercantilism, Adam Smiths Absolute Advantage, David Ricardos Comparative Advantage, and Hechsher-Ohlins Theory of Relative Factor Endowments. However, more recent attempts utilize company-based theories that have developed due to the growing influence of the multinational company on the world economy. The three traditional models of firm internationalization in the marketing literature are the Product Cycle Theory (Vernon, 1966), the Uppsala Model (Johanson and Vahlne, 1977), and the Stages Model (Cavusgil, 1984b; Root, 1987). Each of these models, although instrumental in explaining the historical development of international business, can be viewed in a new light due to the influence of Internet technology. Each are briefly explained here and information is then given as to the direction of international business today. The product cycle theory (Vernon, 1966) focuses on the product manufactured by the firm, not its factor proportions, i.e. whether a country is endowed with more labor or capital.

The product and its method of manufacture experience three stages of maturation as the product becomes more commercialized: new product, maturing product, and standardized product. As the product matures, the cost of production decreases, and the technology of production diffuses, the product changes from being one that is exported by the innovative firm, to one that is eventually imported from a more efficient source. The Uppsala Model (Johanson and Vahlne, 1977; Johanson and Mattsson, 1988; Vahlne and Nordstorm, 1988), proposes that firms will follow a country-by-country sequential process in entering foreign markets. The Uppsala Model assumes that the firm accumulates international market knowledge through experience that is acquired over time. A firm following this model will also depend and benefit from its relationships with other international entities (e.g. distributors, customers, etc.) with which it interacts. Although a firm that is relatively new to the export market may start out using local agents and distributors, it eventually will graduate to more involved and capital-intensive structures over time (e.g. foreign manufacturing or sales offices). The Stages Model (Cavusgil, 1984; Root, 1987) takes a more systematic approach in explaining firm international development. As a firm accumulates more experience, it is

believed to logically progress from a simpler, less involved stage to a more complex stage. Typical stages in their order of occurrence include exporting via an agent or distributor, licensing the product in the market, establishing a sales subsidiary in the market, establishing a joint venture with a local firm, and, ultimately, directly investing in the foreign market by building a manufacturing facility. Regardless of the method of internationalization, the need for firms, especially U.S. firms, to export is understood. As evidenced by such works as Knight and Cavusgil (2004) and Quelch and Klein (1996), Internet technology has facilitated the internationalization process for firms and has allowed them to enter the global market sooner than has historically been theorized by the Uppsala or the Stages models.

Foundational Theory in the Relationship Between the Firm and its Distributors/Distribution Theory

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In spite of whatever skill or competitive advantage a firm may have, the assistance or expertise of another firm somewhere within the supply chain is eventually needed. Even the largest of manufacturers are not totally vertically integrated and often depend on other firms to complete all the necessary steps in the export process. This involvement by other firms is especially relevant to US firms in exporting where they face markets and environments that are quite different from what they face in their domestic markets. A U.S. firm may participate in indirect exporting where it utilizes the services of various independent firms or organizations that are located in the U.S. In this instance the responsibility of selling overseas is assumed by the independent organization. However, in direct exporting such overseas selling remains the responsibility of the U.S. manufacturer. As previously mentioned, export sales activities can be conducted overseas by the firm itself within an integrated channel if it has the resources and expertise. More often, however, such activities are conducted by independent organizations with which the U.S. manufacturer has established a professional iterfirm relationship (Anderson and Coughlan, 1987). From a strategic perspective, this relationship provides critical resources to the U.S. exporters strategic position (Barney, 1991). However, the manufacturer can chose between a range of relationships or contracts to organize the export distribution function. Each contract imposes its own trade-off in terms of control and resource commitment (Anderson and Gatignon, 1986). A dilemma that the exporter faces is therefore that while high performance in the foreign market is the goal, utilizing an independent firm to achieve this goal results in the loss of complete control over the marketing process in the market by the exporter. The uniqueness of the exporter-distributor relationship stems not only from the fact that they are independent organizations with potential conflicts and located in physically separate countries, but also the cultural distance that can exist between the two entities as members of different cultures. Although empirical evidence on the effect of cultural distance on foreign

partnership performance is mixed (e.g. Barkema, Shenkar, Vermeulen and Bell, 1997; Chang, 1995; Johnson, Cullen and Sakano, 1991; Li and Guisinger, 1991; Park and Ungson, 1997), this study takes the position that a greater cultural distance makes the transaction of cross-border trade more challenging and complex. Furthermore, the effect that these differences can have on the exporter-distributor relationship and its performance only underscores the need to study the influence of Internet technology.

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Ultimately, firms seek to maximize organizational performance. In this dissertation, numerous constructs will be investigated in terms of their antecedent effect on this critical variable. As with other studies, performance will be defined in terms of the firms financial goals.

Foundational Theory in the Use of the Internet

The Internet and its related technologies, as enablers, represent an unprecedented opportunity for firms to transcend traditional problems encountered with trade. Smaller firms especially can benefit from the relatively inexpensive and new-found ability to gather information, promote their business, and service new markets (Quelch and Klein, 1996). Possible effects that the Internet can have on the marketing environment which will facilitate the internationalization of firms, lower marketing communication costs, greater price

standardization, reduced information float time, temporal asynchronicity of communication, increased contact between buyers and sellers, and changes in intermediary relationships (Fletcher, Bell, and McNaughton, 2004). Such new information and communication technologies, such as the Internet, create opportunities and challenges for firms within their relationships, industries, and markets. Indeed, the ramifications of the Internet go to the very core of a firms existence by affecting massive organizational restructuring and how firms relate and communicate with their markets. Much of this effect can be considered through the Transaction Cost Analysis (TCA) of Williamson (1975), which argues that firms enter into exchanges because of market opportunities. The coordination of the processes that firms require to provide goods and services can sometimes be provided more efficiently within a firm than through a market exchange. These transaction costs are those costs pertaining to search, information gathering, monitoring/enforcing contracts, and access to resources and processes that are necessary to transform resources into goods and services. Within the TCA framework, when transaction costs are high, a firm will consider it too costly to conduct any required process itself and will thus contract the process through a third party. However, when transaction costs are low, a firm has little incentive to seek necessary transactions from a business-to-business market exchange and will opt to conduct them internally.

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Transaction costs can be further broken down into 1) production costs, or 2) administrative costs. Production costs refer to the costs of processes directly involved in the production or manufacture of the good, such as the technology required for actual production. Administrative costs refer to processes that pertain to costs incurred in support of, or ancillary to, production costs. An example would be the cost of obtaining and processing market

information. The Internet can lower administrative transaction costs in three basic ways: 1) increasing the amount of information available in a convenient and timely manner as to reduce search costs; 2) increasing the ability to compare and negotiate prices and to monitor performance of partners as to reduce contracting costs; and 3) reducing the costs of sharing information and automating and integrating business processes as to reduce co-ordination costs (Fletcher, Bell, and McNaughton, 2004). Similar effects were also emphasized by Lanconi, Smith, and Oliva (2000) when they concluded that the greatest potential of the Internet for supply chain management (SCM) in general is in 1) improving communication between customers and their suppliers, 2) improving service levels, and 3) reducing overall logistics costs.

Key Constructs and the Proposed Relationships Among Them

As independent entities, a U.S. exporter and its international distributor bring their own qualities and expectations to the partnership. Differences in the specific qualities of the partners and their expectations directly influence both the nature, functioning, and outcome of any relationship. Key constructs in the partnership between the exporting firm and its international distributor that are studied in this research include the quality of communications they share, the quality of the relationship itself, the motivation of the distributor, and the performance of the distributor. The focus of this research is the effect that Internet technology has on the business dealings that include these constructs between an exporter and its foreign distributor. The potential effect of Internet technology on distribution and the whole supply chain has been investigated (e.g. Lancioni, Smith, and Oliva, 200) and there are numerous applications of such technology that are available to all members of the supply chain. However, the key to enhanced operations is not only efficient information transfer, but also timely information availability. The Internet has provided the opportunity for both demand-side and supply-side information to be readily available to members of the supply chain (Kehoe and Boughton, 2001).

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Consequently, an exporter and its foreign distributor can exchange information with an efficiency that was not available under a traditional information system. Communication between an exporter and its distributor is essential. It provides for the sending and receiving of information among members of the channel of distribution and between the channel and its environment (Mohr, Fisher, and Nevin, 1996). Communication between channel members creates the flow of information that is necessary to support the flow of products or services to the consumer. Therefore, the exporter must strive to foster an effective flow of information between the firm and its distributor. Considering that the distributor is in another country with differences in time, language, culture, goals, etc., the firm will need to attend to the quality of communication, i.e. speed, frequency, and accuracy. The relationship between the U.S. exporter and its foreign distributor will determine the depth and extent of their business interactions and the climate in which they will pursue shared objectives. Types of interfirm relationships range from arms-length agreements to more

integrated and interdependent arrangements. However, it is not the type of relationship between an exporter and distributor with which this study is concerned, rather it is the quality of the relationship. Consequently, this research asserts that any type of business relationship,

regardless of the amount of interdependence, can be described in terms of its relationship quality. Due to the growing competitive environment and the importance of interfirm partnerships that globalization presents, an exporting firm must depend on the performance of their distributor for success in a foreign market. Since a distributor is an independent organization and has its own objectives and goals that are separate from that of the U.S. exporter, it does not automatically react promptly and cooperatively to the exporters needs. Consequently, it is a responsibility of the U.S. firms management to support and motivate its distributor to perform in a manner that would achieve desired objectives and goals. The rationale behind an exporting firms motivation of its distributor is to maximize the distributors opportunity and willingness to perform those duties that would lead to market success. Cavusgil and Zou (1994) found that performance of export ventures increased with the amount of support the distributor received from the exporting firm. The sole reason behind joining forces with a partner is to enhance firm performance. In fact, all advantages of the

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exporter-distributor relationship should both directly and indirectly translate into enhanced performance for each partner.

Use of Internet Technology Although Internet technology is a broad term encompassing a wide range of applications, such as email, intranet, extranet, webpages, etc., not all organizations use each application. Some firms may be advanced enough to utilize complex extranets, but others may see a simpler application, such as email, as being adequate for their needs. Therefore, the adoption of a specific application will depend on the individual needs, roles, and capabilities of the firm. However, the common thread that ties all of these applications together is the technology of the Internet itself. It is the technology of the Internet that makes it the enabler that it is, not one specific application. Consequently, for the purpose of this research, the term Use of Internet Technology will refer to the use of any Internet technology by an exporter in the process of conducting business with its foreign distributor.

Quality of Communication For the purposes of this study, Quality of Communications is defined as the speed, frequency, and accuracy of information exchange between a U.S. exporting firm and its foreign distributor. As previously mentioned, communication between channel members has been

described by Mohr and Nevin (1990) as the glue that holds together a channel of distribution. As such, communication provides for the sending and receiving of information among channel members and between the channel and its surrounding environment (Mohr, Fisher, and Nevin, 1996). Regarding the inadequate frequency of communication between channel members, Mohr and Sohi (1995) found that it could inhibit effective channel communication because it tends to make members feel out of the loop and may deprive members the necessary information to achieve market objectives and goals. Consequently, a firm with channel members overseas, particularly in numerous markets with different languages, social customs, time zones, etc., will need to assure that the quality of information exchange, i.e. communication, is adequate between its management and its foreign distributors. This quality of information exchange is a function of speed, frequency, and accuracy.

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Quality of Relationship Although several studies have stressed the importance of the quality of relationships in different settings (e.g. Dwyer, Schurr, and Oh, 1987; Johnson et al., 1993; Kumar, Scheer, and Steenkamp, 1995), few have agreed upon the dimensions or terms in which the quality of a relationship should be defined. For the purposes of this dissertation and in order to capture the overall depth and strength of the exporter-distributor relationship, the construct Quality of Relationship will be defined as the degree of trust, cooperation, and commitment that exists between a U.S. exporter and its foreign distributor in their interfirm relationship. Bleeke and Ernst (1993) state that For most global businesses, the days of flat-out, predatory competition are over.In place of the predation, many multinational companies are learning that they must collaborate to compete. That collaboration is similar to the network paradigm espoused by Thorelli (1986) in which more and more competition in the global marketplace is occurring between networks of firms. According to Morgan and Hunt (1994), commitment and trust are key elements of the relationship because they produce outcomes that promote efficiency, productivity, and effectiveness. Furthermore, commitment and trust lead directly to cooperative behaviors that are conducive to relationship success.

Distributor Motivation Motivation has been defined as the set of processes that arouse, direct, and maintain human behavior toward attaining a goal (Greenberg and Baron, 1993). In the context of an exporter-distributor relationship, motivation would be any action taken by the manufacturer (exporter) to foster strong channel member cooperation in implementing the manufacturers (exporter) distribution objectives (Rosenbloom, 2004). Since distributors, as channel members, are independent organizations with their own objectives and goals, they do not always respond automatically to manufacturer needs in a cooperative manner (Heide, 1994). Consequently, without the proper motivation of channel members by the manufacturer, distributor performance may be unsatisfactory. Therefore, for the purpose of this research, the concept of Distributor Motivation is defined as the willingness of the distributor to pursue and conduct activities that lead to the attainment of distributor objectives and goals.

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Distributor Performance As pointed out by Katsikeas, Leonidou, and Morgan (2000), export performance is one of the most widely researched, yet least understood and most controversial, concepts in international business. Part of this controversy could be attributed to the lack of agreement in conceptualization, operationalization, and measurement of export performance as a construct and the taking for granted of its role in international business. Although a widely researched topic, the export performance literature is very fragmented, making definition and understanding of the concept difficult (Cavusgil and Zou, 1994, Gunert and Ellegaard, 1993). As a consequence, the development of reliable and valid measures of export performance is problematic and inconsistent (Mattyssens and Pauwels, 1996; Walters and Samiee, 1990). Yet, export

performance remains important to both managers (Kumcu, Harcar, and Kumcu, 1995); Samiee and Walters, 1990) and marketing researchers (Zou and Stan, 1998). Although a simple definition of export performance would be the outcome of a firms export marketing activities (Shoham, 1996), this study is concerned with export performance only at the distributor level. Performance of the distributor is relevant because of its vital role in the export supply chain and is a major determinant of export market performance. Even though performance can be measured by economic and non-economic means (Cavusgil and Zou, 1994; and Matthyssens and Pauwels, 1996), for the purpose of this study Distributor Performance is defined as the extent to which the distributor achieves its pre-determined objectives and goals in the export market.

Hypotheses Development

The Internet Historically, as indicated by the literature (e,g, Johanson and Vahlne, 1990; Cavusgil, 1984; Root, 1987), firms have typically become involved in the international market through some sort of evolutionary or sequential process. However, there is evidence that firms do not necessarily use this technique to enter foreign markets (e.g. Millington and Bayliss, 1990; Turnbull, 1987). As indicated by Knight and Cavusgil (1996, 2004), the use of technology, such as the Internet, helps firms overcome traditional barriers to conducting international trade such as time and distance, and allows firms to bypass conventionally recognized stages. This advantage

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permits any firm to obtain instant access to worldwide markets by merely establishing a website (Quelch and Klein, 1996). To the extent that a positive relationship exists between Quality of Communication, Quality of Relationship, Distributor Motivation, and Distributor Performance, it is logical to investigate this linkage in broader contexts of other variables. The marketing of goods and services overseas is a complex process tempered with growing competition, increased customer demands, and the need for greater efficiencies in the supply chain. In this dissertation, I

investigate the likely effect of the Internet on the relationships proposed in Figure 1. The Internet provides a variety of benefits for an exporting firm in conjunction with its distributor. Contrary to the popular belief that the Internet will lead to disintermediation of the supply chain, there is evidence that the Internet can actually improve relationships (Narayandas, Caravella, and Deighton, 2002; Zank and Vokurka, 2003). Manufacturers and distributors can benefit from enhanced information availability and savings from improvements in productivity and a reduction in processing costs (Cohn, Brady, and Welch, 2000; Croom, 2000). In supply chain management, especially in an international environment, effective communication and sharing of information is vital to the success of a distributor. According to seminal works such as Galbraith (1973), Weick (1979), and Lengel and Daft (1984), organizations process information in order to reduce uncertainty (i.e. the lack of information) and equivocality (i.e. ambiguity). These two qualities can influence the information processing that is required for adequate organization performance. Uncertainty can be reduced by obtaining more information from any communication medium. However information and issues can be fuzzy and have several interpretations, especially when a firm is dealing with a foreign organization, as with an export distributor. This is what causes equivocality According to Weick (1979), managers reduce ambiguity by cooperatively defining and creating an answer, rather than learning the answer by collecting more data. Daft and and Lengel (1984) asserted that face-to-face media were better for equivocal or ambiguous message, while written media could be used for unequivocal messages. Therefore the type of message can influence the choice of medium that is used. Due to differences in such things as culture, language, law, and simple time and distance, many issues, ideas, and intentions in international business can be ill-defined and open to different interpretations. According to Dwyer, Schurr, and Oh (1987), a major aspect of

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information technology investments is the facilitation of frequency of contact and greater information sharing, which are crucial aspects of better interfirm relationships. Sriram and Stump (2003) found that information technology investments can indeed foster collaborative communication by positively affecting the frequency of communication between partners. However, not only the speed and frequency of communication is important, but also the accuracy of information. This accuracy can be facilitated by the richness of the information that is carried by the medium. Daft and Lengel (1986) define media richness as the ability of information to change understanding within a time interval. These rich communications can, in a timely manner, overcome different frames of reference and clarify ambiguous issues that can affect mutual understanding. According to Daft and Wignton (1979), differences in richness are based on the mediums capacity for immediate feedback, the number of cues and channels utilized, personalization, and the variety of language, all of which could allow managers to converge on a common interpretation. Media vary in the capacity to process rich information (Daft and Lengel, 1984). Based on a decreasing level of richness, media classifications are 1) face-to-face, 2) telephone, 3) personal written documents, 4) impersonal written documents, and 5) numeric documents. In equivocal situations, face-to-face techniques would be preferable (Daft and Macintosh, 1981). Vickery et al (2004), in their study of the richness of certain media utilized in a business-tobusiness context, including electronic media such as e-mail, found that media richness can have both a direct effect on the initiation, development, and maintenance of the interdependent relationship and through it, an indirect effect on performance indicators such as satisfaction and loyalty. This is of particular relevance to the export-distributor relationship, since it is one of organizational interdependence and exists in a complex environment. A face-to-face meeting with a foreign distributor is not always possible for an American exporter. Although other forms of communication provide similar benefits as the Internet, such as speed and frequency, the Internet provides a certain media effect involving a combination of richness, convenience, and synchronicity that other methods do not. According to the

characteristics presented by Vickery et al. (2004), electronic media, such as email, can provide fast feedback, a limited visual channel, personal messaging, both natural and numeric language, and a high/moderate level of information richness. However, when certain Internet capabilities such as teleconferencing and web cams are added, these ratings can increase. Plus other studies

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have noted that

Internet technologies reduce the cost of communication and information

coordination and promote better communication between organizations (Hoffman and Novak, 1996; Lewis and Talalayevsky, 1997). These capabilities lead to the first hypothesis.

H1: In the relationship between the exporting firm and its foreign distributors, Use of Internet Technology is positively associated with the Quality of Communication.

Distributors perform a variety of services for exporters, including increasing sales, customer contact and service, and market feedback. The environment in which these foreign distributors perform these functions is increasingly dynamic and turbulent, making effective performance increasingly difficult. Sources of this environmental turbulence include numerous cultural, political, and economic differences (Czinkota et al., 2001). Plus, distributors are

independent firms and can have loyalties to other manufacturers. Consequently, an ongoing task of any exporting firm is to motivate their foreign distributor to do what is necessary to achieve the exporters established objectives and goals. The motivation of international distributors is accomplished with the same basic approach as that of domestic distributors. However, there are significant differences in the international environment which can make it more challenging. McVey (1960) notes that the distributor does not consider itself as a hired hand, but as a representative of its own customers and the complete product line it may carry. Without proper incentive, the distributor will not treat one product any differently than another. Consequently, it is important for an exporter to communicate often and effectively with its distributor. Various authors have stated that firms must learn what their distributors want out of the channel relationship (Eyuboglu, 1993; Rosenbloom, 1999) in order to provide them with motivation. As reported in Quelch and Klein (1996), the Internet helps to overcome barriers to communication between firms, employees, and customers by removing impediments created by differences in geography, times zones, and location. This results in a frictionless business environment in which firms can interact. By providing such a frictionless interaction, the Internet, with its richness and asynchronous capability, can facilitate the exchange of more information and knowledge, which will allow the exporter to better ascertain the needs and

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problems of the distributor, offer support that is consistent with those needs, and provide more motivation in the form of clearer expectations and goals.

H2: In the relationship between the exporting firm and its foreign distributor, Quality of Communications is positively associated with Distributor Motivation.

The exchange of information plays a central role in this studys definition of Quality of Communication. The concept of information exchange is defined by Narus and Anderson (1990) as the formal and informal sharing of meaningful and timely information between firms in the context of inter-organizational partnerships. Both Morgan and Hunt (1994) and Moorman, Deshpande, and Zaltman (1993) believe that the exchange of timely information can lead to increased trust since communication facilitates dispute resolution and assists in the sharing of perceptions and coordination of expectations. Anderson and Narus (1984, 1990) believe that meaningful communication is a requirement for trust between firms in a partnership. Coughlan et al. (2001) reinforce this belief by concluding that trust can be generated within marketing channels through increased communication. Furthermore, this building of trust can, in turn, lead to better communication, which would further reinforce trust (Anderson and Narus, 1984, 1990). Once firms establish trust through improved communication, they can coordinate efforts in order to achieve outcomes that would not be possible if each firm acted individually in its own interest. Heide & John (1992) state that when firms believe they will receive all information on a continuing basis from their partner, it will assist in dealing with changes in internal and external environmental conditions. It has been determined that the frequency and quality of information exchange can be a significant determinant of the extent to which parties in a partnership understand each others goals and coordinate efforts to achieve mutual goals (Grabner and Rosenberg, 1969; Guiltinan, Rejab, and Rodgers, 1980). This coordination of efforts leads to stronger working relationships. In a study of electronic data interchange (EDI), Marcussen (1996) points out that technologies such as EDI can, on one hand, appear to be impersonal and actually weaken relationships. On the other hand, however, he points out that the increased speed and accuracy of information exchange should strengthen relationships. Indeed, Larson and Kulchitsky (2000), in another study of EDI, found that closer buyer-supplier relationships can result from higher

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quality of information. Sriram and Stump (2003) found that the quality of relationship with suppliers is positively affected by the frequency of communication resulting from investments in information technology. This same communication quality can positively affect the relationship between an exporter and its foreign distributor. NOTE: In this dissertations original proposal, three dimensions of Quality of Relationship, i.e. Trust, Cooperation, and Commitment, were addressed collectively. However, upon further analysis it was determined to treat them as individual constructs. This decision is supported by the literature. These changes are reflected in the following hypotheses.

H3a: In the relationship between the exporting firm and its foreign distributors, Quality of Communications is positively associated with Trust.

H3b: In the relationship between the exporting firm and its foreign distributors, Quality of Communications is positively associated with Cooperation.

H3c: In the relationship between the exporting firm and its foreign distributors, Quality of Communications is positively associated with Commitment.

Communication is but one aspect of a channel relationship. In their study regarding communication, Anderson, Lodish, and Weitz (1987) found that through participation in mutual goal setting (i.e. an inter-organizational relationship) channel members internalize goals for performance. As a consequence, they are more strongly motivated to achieve those goals. However, this participation is a direct result of the working relationship the two parties share. In his case study on how a firm stimulates distributor sales, Weber (2000) found that through partnering the firm was able to design attractive incentives for the distributor that resulted in a competitive advantage for the firm. Although communication can facilitate motivation, Shipley and Jobber (1991) point out that there is no guarantee that distributors will respond to such motivators. Rather, it is the nature of the relationship between the exporter and distributor that contributes to the motivation of the distributor. In fact, according to Siquaw, Simpson, and Baker (1998), the channel

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relationship can be considered as a reference group from which a distributor feels compelled to conform to norms established by the supplier. As determined by Boyle (2001), use of Internet technology tends to enhance commitment between supply chain partners and can, therefore, draw them closer together. The more trust, commitment, and cooperation two firms share, the more they will realize that their coordinated efforts will achieve greater outcomes than what each member would achieve independently (Anderson and Narus, 1990). Stern and El-Ansary (1992) state that such inter-firm cooperation is a central theme in channels of distribution theory. Etgar (1979) believed that timely

communication promotes trust by assisting in the resolution of disputes in the relationship and aligning perceptions and expectations. This willingness and ability to resolve disputes and align perceptions and expectations is what an exporter needs to determine the needs and wants of a distributor that will result in its motivation. NOTE: In this dissertations original proposal, three dimensions of Quality of

Relationship, i.e. Trust, Cooperation, and Commitment, were addressed collectively. However, upon further analysis it was determined to treat them as individual constructs. This decision is supported by the literature. These changes are reflected in the following hypotheses.

H4a: In the relationship between the exporting firm and its foreign distributors, Trust is positively associated with Distributor Motivation.

H4b: In the relationship between the exporting firm and its foreign distributors, Cooperation is positively associated with Distributor Motivation.

H4c: In the relationship between the exporting firm and its foreign distributors, Commitment is positively associated with Distributor Motivation.

Scholars theorize that the quality of communications between the firm and its international distributor can strongly influence the overall performance of the distributor in foreign markets (Cavusgil, 1983; Madsen, 1989; Amine and Cavusgil, 1986; Kirpalani and MacIntosh, 1980). It is logical that an interdependent firm, such as a distributor, would be able

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to perform its duties more effectively if it had a better understanding of what were the exporters goals in that particular market and what the exporter expected from the distributor. Larson and Kulchitsky (2000) found that information quality has a direct and favorable impact on performance. Although they included it as a dimension of relationship, Rosson and Ford (1982) found that communication intensity between an exporter and its overseas distributor was positively correlated with export performance. Furthermore, Anderson and Narus (1984, 1990) determined that the positive correlation between outcomes and communication was actually reciprocal, i.e. communication facilitates beneficial outcomes between a manufacturer and its overseas distributor, while such outcomes in turn facilitate further communication. As part of the glue that holds a channel of distribution together, effective communication allows for the exchange of information between partners in an interfirm organization. Inadequate communication can cause a member to feel left out (Mohr, Fisher, and Nevin, 1996) and inhibit the information needed to achieve market objectives and goals. Salcedo and Grackin (2000) point out how information sharing and management (i.e. communication) can lead to enhanced performance in partners. According to Srinivasan, Kekre, and Mukhopadhyay (1994), performance gains from such innovations as just-in-time delivery depend on real-time sharing of accurate information between the buyer and supplier. According to Simchi-Levy et al., (2000), the ability to share information via Internet technology allows supply chain partners to enhance customer value by allowing them to sense and respond to customer needs instead of simply selling what is produced. Furthermore, Vickery et al., (2004) found that media richness has a direct effect on B2B customer loyalty, which has been linked to such performance measures as increased market share and revenue (e.g. Blattberg, et al. 2001; Reichheld 1993). In essence, a foreign distributor could be considered as a B2B customer of the exporter, whose loyalty can affect performance. Based on this reasoning, this study proposes the following:

H5: In the relationship between the exporting firm and its foreign distributors, Quality of Communications is positively associated with Distributor Performance.

All definitions of the concept of motivation include some sort of outcome-related or goal-directed activity (e.g. Greenberg and Baron, 1993; Mitchell, 1982; Robbins, 1993;

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Rosenbloom, 2004). In a business relationship setting, the goal is usually increased or improved performance in order to increase profitability. However, performance in the supply chain, particularly distribution, has traditionally been acknowledged as a weak link in the overall marketing chain which can add to overall costs (Weber, 2000). Lassar and Kerr (1996)

acknowledge that a manufacturers attempts to achieve its goals could suffer if a distributor fails to exert sufficient effort on the manufacturers behalf, thus emphasizing the relation between the level of motivation and the outcome of performance (Ramlall, 2004). Shipley and Jobber (1991) further acknowledge this relation of motivation to performance (Walker et al, 1979) in their call for more motivation of salespeople. In fact, Mehta, Dubinsky, & Anderson (2003), state that higher channel partner motivation is directly associated with higher performance. It is almost intuitive that the more a worker is motivated, the more they will perform. According to expectancy theory (Vroom, 1964), an employees performance level is a product of his/her motivation based on the belief that such performance will result in a good performance appraisal and, consequently, a reward. Such rewards, whether money-oriented or not, are

intended to satisfy the employees needs or goals. The key to such an approach is understanding a) the individuals goals and b) the linkage between the goals, the effort exerted to achieve them, and the satisfaction received from the resultant reward. Simply because an exporter may

understand the needs his/her distributor is seeking to satisfy does not guarantee that the distributor will perceive high performance as a means to achieve the satisfaction of those needs. In such a situation, the added richness of Internet technology will allow the exporter to both better ascertain the needs and problems of the distributor (Rosenbloom, 1999), whereby determining how best to motivate them, and convey the requisite expectations and rewards to the distributor. However, what motivates a person is highly cultural specific. The U.S. emphasizes individualism, while other cultures emphasize what is good for the group, or collectivisim (Hofstede, 1984). Therefore a U.S. exporter must accurately determine the foundation of its distributors needs and goals, plus how it can best satisfy those needs and goals. Again, the richness of Internet technology will facilitate such a task and, consequently, positively affect the distributors performance.

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H6: In the relationship between the exporting firm and its foreign distributors, Distributor Motivation is positively associated with Distributor Performance.

When firms, such as an exporter and its distributor, decide upon a strategic relationship, the firms decide to proactively combine their resources in order to expand their joint capabilities, thereby enhancing their competitive advantage (Borys and Jemison, 1989). The nature of the relationship becomes key. A stronger relationship will lead to higher levels of performance. The literature has indicated that close interfirm relationships exhibiting such characteristics as trust and commitment offer various benefits to participants (Gundlach, Achrol, and Mentzer, 1995; Morgan and Hunt, 1994). A positive association between trust in a relationship and performance has been supported in different contexts (Crosby, Evans, and Cowles,1990; Robicheaux and Coleman, 1994). The works of Madhok (1995) and Parkhe (1993a) have even extended this finding to cross-border relationships. Using the work of Morgan and Hunt (1994) to establish that cooperative relationships depend on considerable commitment and trust and drawing from the work of Anderson and Narus (1990) to note that cooperative relationships can enhance a firms competitiveness, Weber (2000) found that improvement in distribution performance results when a firm teams with its distributor. Zaheerm NcEvily, and Perrone (1998) found a strong link between

interorganizational trust, while Larson and Kulchitsky (2000) proved that closer buyer-supplier relationships lead to improved performance. In addition, Rosson and Ford (1982) established

that the most successful exporter-distributor dyads were those in which the parties adapted their roles and routines and displayed a commitment to jointly developing business in a chosen market. According to Johnston and Vitale (1988), companies use information technology for competitive advantage in systems that tie their firm to members of the supply chain. These organizations use the electronic link between them to significantly change their relationship. They have found that the increased familiarity provided by their joint systems serves as a means to collaborate on a wide range of initiatives that can improve the performance of each partner. Although Aulakh, Kotabe, and Sahay (1996) did not find statistical support that trust is positively related to a partnerships market performance, this merely suggests that trust may not have a unique contribution in explaining the variance in partnership performance, but could

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possibly contribute to the overall affect of the relationship on performance. According to Wen, Yen, and Lin (1998), it is not the technology itself that helps improve performance, but the enhancing effect that information technology has on interfirm relationships that is the cause. This supports the view of Mohr and Nevin (1990) that quantitative channel outcomes, such as performance, are preceded by qualitative outcomes, such as the quality of relationship. This was confirmed by Sriram and Stump (2004) when they found that relationship quality, as enhanced by information technology, can positively affect performance. NOTE: In this dissertations original proposal, three dimensions of Quality of

Relationship, i.e. Trust, Cooperation, and Commitment, were addressed collectively. However, upon further analysis it was determined to treat them as individual constructs. This decision is supported by the literature. These changes are reflected in the following hypotheses.

H7a: In the relationship between the exporting firm and its foreign distributors, Trust is positively associated with Distributor Performance.

H7b: In the relationship between the exporting firm and its foreign distributors, Cooperation is positively associated with Distributor Performance.

H7c: In the relationship between the exporting firm and its foreign distributors, Commitment is positively associated with Distributor Performance.

Summary

The primary research questions that are addressed in this dissertation are 1) How does Internet Technology affect communication between a U.S exporter and its foreign distributor, and 2) how does that quality of communication affect antecedents to distributor performance such as quality of relationship and distributor motivation. A total of thirteen hypotheses are proposed in this chapter to address questions. A theoretical model of the hypothesized

relationships was reviewed also. The next chapter addresses the research design of the study, data collection procedures, analysis plan, and the statistical results of the study. I describe how I intend to test these hypotheses in an empirical study of international firms.

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CHAPTER 3 RESEARCH METHODOLOGY

Chapter Introduction This chapter addresses all major aspects of the research design and data analysis. These aspects are discussed in three stages. First, the sampling approach and descriptive information about the research design are discussed. Second, questionnaire construction, measures, and validation of the measurement scales are reviewed. Third, results are presented for the tests of the studys hypotheses for the proposed model of the effect of Internet technology on the relationship between an exporter and its overseas distributor.

Research Context A field study was conducted to test the hypothesized relationships. A field study refers to a non-experimental scientific inquiry aimed at hypothesis testing in real social structures (Kerlinger and Lee 2000). The specific context for the dissertation involves a cross-sectional survey within small medium sized U.S. exporters. This context is desirable as it allows for the examination of Internet technology use in various contexts, while offering a relatively homogenous sample from a single industry sector. The phenomenon of interest in this dissertation (i.e., the exporter-distributor relationship) suggests the appropriateness of a survey-based data collection as part of a field study. Surveys provide an effective means of studying naturally occurring phenomenon and interrelationships among multiple variables. Further, many of the constructs of interest in this dissertation have no means of direct assessment beyond self-reports on a questionnaire. Therefore, many of these

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variables (e.g., quality of communication and quality of relationship) are not readily subject to manipulation in a laboratory setting. A field study offers several other advantages for the testing of hypotheses (Kerlinger and Lee 2000). First, field studies are strong in realism and the generalizability of research results. Second, the variance of many variables in field settings is large, particularly when compared to the variance of variables in a laboratory setting. This is of significant relevance due to the typically small relationships between psychological constructs and performance variables. Third, field studies provide a greater range of variables due to their natural settings. This allows for an improved theoretical understanding of the range of Internet technology and an enhanced managerial understanding of the factors that contribute to the exporter-distributor relationship. Finally, a field study allows for the determination of the actual strength of relationships among the various constructs in a real setting. Several steps have been taken to limit the weaknesses associated with survey-based field studies (e.g., limited causal inference, control of extraneous variance, and time requirements) (cf., Kerlinger and Lee 2000). First, a single industry setting (i.e. exporting) for the study was chosen to limit time and cost constraints. The targeting of export management also permits for access to a knowledgeable and motivated sample. With this support, a high response rate was expected. This is particularly relevant given that the focus of analysis is on the relationship between an exporting company and its overseas distributor. A single research context also helps to control for certain extraneous sources of variance (Kerlinger and Lee 2000). Using a single research context helps to eliminate potential extraneous variables that may differ across firms. This allows for a more valid test of the hypotheses. For example, export management employees may be expected to share similar experience and have a common procedures, documentation, and methods of exporting. understanding of the

Research Design The sample of this study is based on subject firms taken from a listing of established SME exporting manufacturers that was obtained from The American Export Register of the Thomas Publication Group. Since small and medium sized enterprises (SME) comprised 97.5 % of all U.S. exporters and since over 30.5% of all U.S. merchandise exports in 1997 (USITA,

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1999) was from SMEs, they represent a significant economic group and, consequently, are used as a source for the sampling of this dissertation. According to the U.S. Department of Commerces Office of Trade and Economic Analysis, small and medium sized enterprises are defined as companies with fewer than 500 full-time employees (FTE). Since this study focuses on exporting, export managers, or the firm equivalent, were targeted as respondents for the sample. The use of a common identifying trait (i.e. exporting) among sampled firms provides the advantages of a more homogenous sample than if a random selection of firms was used. Homogeneous samples are desirable for basically two reasons (Calder, Phillips, & Tybout, 1981): 1) homogeneous samples reduce the likelihood of a Type II error by reducing error variance that can be attributed to non-theoretical constructs while increasing the sensitivity of statistical tests that are used to detect significant relationships; and 2) common characteristics and experience of a homogeneous group reduces variance, thus permitting a more exact theoretical prediction than would be possible with a heterogeneous sample. Increased variability in behavior associated with a heterogeneous group would make precise predictions more difficult and thus makes the failure of the theory more difficult to detect.

Sample Characteristics A total of 2,950 exporting manufacturers across the United States composed the sample for this study. The managers who are responsible for exporting the goods of these firms were targeted to participate in the survey. These managers were asked to complete the survey by referring to their most important distributor in their most important export market. A large sample of export managers is required to reduce the error variance of the sample and to increase the power of the statistical tests (Cohen, 1992; Kerlinger and Lee, 2000). To achieve a power of .80 with a medium effect size using aggregated data, a target for data collection of at least 150 respondents has been selected (cf. Cohen, 1992). Prior to the distribution of the studys questionnaire, six meetings were held with exporting firms and export industry specialists as a pre-test. These exporters and industry specialists provided valuable input relating to the questionnaires construction and design. Such input included information regarding the appropriateness of question wording and content and

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the clarity of instructions. Iacobucci (2002).

Pre-testing of questionnaires is considered vital by Churchill and

Pre-testing an instrument helps to 1) to assess the appropriateness of the

instructions and data collection procedures before administering the questionnaire to the studys sample, and 2) to examine the reliability and validity of the measures. While this input was insufficient to adequately evaluate the discriminant and convergent validity of the scales, the information gathered was extremely helpful in providing face validity and in making the instrument understandable and acceptable to the studys sample.

Response Rate and Sample Characteristics A total of 265 completed surveys were received from the 2,950 exporting firms that were mailed an instrument. This resulted in a response rate of 8.9%. Of the original responses, three responses were discarded due to incomplete questionnaires where the respondents completed only four of the nine scales. In addition, one response was discarded due to possible response bias (the respondent answered the Likert scales in a 1,2,3,4,5,4,3,2,1 pattern and then wrote I dont have time for this!! across the instrument). These deletions from the responses resulted in a final useable sample of 261 and an effective response rate of 8.8%. Non-response bias was assessed using an extrapolation method of Armstrong & Overton (1977) in which a sample of key variables was used to compare a sample of late respondents to a sample of early respondents. The rationale for this method is that late respondents are thought to be more similar to non-respondents than early respondents. The first quartile of respondents was compared to the last quartile of respondents on the number of employees (i.e. firm size), the number of countries to which the firm is exporting, how long the firm has been exporting, total sales, and the percent of international sales to total sales. Based on t-tests for Equality of Means scores, there was no significant difference between the first and last quartiles of the sample for the number of countries to which the firms export, how long the firms have been exporting, or the percent of international sales to total sales. However, a significant difference was indicated between the size of the firm and total sales. Firms in the last quartile to respond tended to be larger firms with more total sales than those in the first quartile of responses. This difference can be explained by the tendency of larger firms, both in number of employees and total sales, to take longer to complete a

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questionnaire because of the time involved in routing the instrument to the relevant manager. Conversely, in a smaller firm, where it is easier for employees to know each other and managers often have multiple titles or responsibilities, a survey can reach the appropriate manager is a shorter period of time, thus allowing the instrument to be returned sooner. With the information obtained from this comparison of quartiles, it was determined that no response bias existed among the sample data and statistical analysis of the constructs of interest could proceed. Of the valid responses, 56.3% of the firms had 1-49 full-time employees (FTE); 18.6% had 50-100 FTE; 8.0% had 101-149 FTE; 7.2% had 150-200 FTE; 2.3% had 201-249 FTE; 2.3% had 250-300 FTE; .8% had 301-349 FTE; 1.1% had 350-400 FTE; 0% had 401-449 FTE; and 3.0% had 450-499 FTE (99.6% total). The average number of countries to which the respondents exported was 15. The average number of years respondent firms had been exporting is 25 (since 1980). The mean percentage of sales that are international is 23.2%. Of the respondents, 23.2% listed Canada as their most important export market; 15.6% listed Germany; 11.4% listed Mexico; 6.1% listed China; 5.7% listed Japan; 4.2% listed the United Kingdom; 3.4% listed Sweden; 2.7% listed Taiwan; 2.3% listed The Netherlands; 2.3% listed France; 1.5% listed Italy; 1.5% listed Spain; 1.5% listed South Africa; 1.1% listed Venezuela; and 1.1% listed Singapore. The remainder of the total were composed of percentages of <1%. The average percentage of total sales that was due to respondents most important export product was 10.14%. Furthermore, 53.8 % utilized independent distributors as their overseas representative, 16% utilized sales representatives, and 10.3% used agents.

Measures The selection of construct measures and the structure of the questionnaire represent critical design characteristics. With the exception of Use of Internet Technology, Distributor Motivation, and Distributor Performance, which were operationalized based on relevant literature, all of the construct measures used in this dissertation are established and validated scales. All scales are self-reported measures by export management. Self-reports are used since no other source of valid measurement is available due to the nature of the variables. It is the subjective assessment of the effect of Internet technology by the export manager that is being measured and theorized to influence the firms relationship with its foreign distributor. All

32

scales were measured using 5-point Likert scales and all indicated good reliability with each Cronbach alpha exceeding the commonly accepted standard of .80 (Peter 1979). The measures are summarized and listed with their respective composite reliabilities and loading factors in Appendix A.

Use of Internet Technology The use of Internet technology in distribution channel management can have a profound effect on various elements, including inter-firm communications, vendor-relationships, and coordination of orders and stock levels (Lancioni, Smith, and Oliva, 2000). In fact, Christopher and Jutner (2000) reinforce the idea that the most effective Internet strategy for manufacturers, including exporters, is one in collaboration with other channel partners. This dissertation is concerned with how the use of Internet Technology affects the exporter-distributor relationship and its performance. Since no scale has been established in the literature to measure Internet technology use by exporters, Use of Internet Technology will be measured by a formative scale constructed specifically for this study to determine the extent to which firms use Internet technologies in their dealings with their overseas representative. Technologies of interest include any Internet based technology, e.g. email, intranet, extranet, websites, data exchange programs [e.g. electronic data interchange (EDI)], video conferencing via web cameras, etc. These items were measured using 21 items in a 5-point Likert-type formative scale from 1 (never) to 5 (always) in addressing questions regarding typical dealings involving an exporter and its overseas representative. Traditional measures, as those emphasized by Churchill (1979), are ones in which the direction of causality is said to stem from the construct to its indicators and suggests that any change in the underlying construct will result in a change in the indicators. These measures are referred to as reflective (Fornell and Bookstien, 1982). However, not all measures assume to be caused by a single construct, but, instead, can actually have an impact on the construct itself. In other words, the direction of causality stems from the group of indicators to the latent construct. These measures are referred to as formative (Fornell and Bookstein, 1982). The application of formative scales in marketing research has been addressed by Jarvis, MacKenzie, and Podsakoff (2003). These authors cite Bollen and Lennox (1991) to point out

33

that traditionally used methods (i.e. reflective scales) are not always appropriate when the direction of causality is believed to stem from the measures to the constructs. Indeed, as with Use of Internet Technology in exporting, since no proven scale exists, a formative measure was constructed to indicate the degree of internet technology usage for various tasks that are typically performed between an exporter and its foreign representative. After consulting with academics specializing in international trade, local representatives of U.S. Export Assistance Centers, and actual exporters, a list of 21 export-related functions that could be accomplished with Internet technology was compiled. All other scales used in this study are reflective.

Quality of Communication Communication has been described as the glue that holds together a channel of distribution (Mohr and Nevin, 1990). This study is concerned with how the use of Internet Technology can affect the influence of communication on the exporter-distributor relationship and its performance. Communication quality was measured using a scale based on one used by Morgan and Hunt (1994) and adapted from Anderson, Lodish, and Weitz (1987). These authors developed this scale to measure the degree of feedback and mutual participation in goal setting between channel members. a Chronbach alpha of .923. The 6 quality of communication items were measured using a 5point Likert scale from 1 (strongly disagree) to 5 (strongly agree). In this dissertation it exhibits

Quality of Relationship Morgan and Hunt (1994) define relationship marketing as all marketing activities directed toward establishing, developing, and maintaining successful relational exchanges. This dissertation addresses the issue of whether the use of Internet technology can influence certain dimensions of the relationship between an exporter and its distributor. In this study, the Quality of the Relationship will have three dimensions: trust, commitment, and cooperation. Moorman, Deshpande, and Zaltman (1983) state that trust is a willingness to rely on an exchange partner in whom one has confidence. This construct was measured using the Dyadic Trust Scale of Larzelere and Huston (1980) and validated by Morgan and Hunt (1994). It was originally developed to measure trust in personal relationships, but it has been used effectively in measuring trust within organizations. The scale exhibits good reliability (Coefficient alpha =

34

.93) and validity. The trust dimension of the Quality of Relationship construct was measured using seven items in a 5-point Likert scale from 1 (strongly disagree) to 5 (strongly agree). Cooperation is said to be the joint effort aimed at achieving individual or systematic goals (Schermerhorn, 1975). This construct will be measured using a scale from Brown (1979) and validated by Morgan and Hunt (1994). It was originally developed to measure the level of cooperation across different types of marketing channel relationships. It exhibits good reliability (Coefficient alpha = .70) and validity. The cooperation dimension of the Quality of Relationship construct was measured using six items in a 5-point Likert scale from 1 (extremely low) to 5 (extremely high). Morgan and Hunt (1994) define commitment in a relationship as an exchange partner believing that an ongoing relationship with another is so important as to warrant maximum efforts a maintaining it This construct was measured using a scale of three items adapted from Siquaw, Simpson, and Baker (1998) and three items adapted from Morgan and Hunt (1994), to indicate the extent of effort toward an on-going relationship. The scale exhibits good reliability (Coefficient alpha = .91) and validity. These six items for the commitment dimension of the Quality of Relationship construct was measured using a 5-point Likert scale from 1 (strongly disagree) to 5 (strongly agree). As was presented originally in this dissertations proposal, the three chosen dimensions of Quality of Relationship were to be analyzed collectively as one construct. However, as a result of distinctive characteristics exhibited by these three dimensions during factor analysis, it was decided to treat them as independent constructs and analyze them individually in this study.

Distributor Motivation Motivation is considered by Robbins (1993) as the willingness to exert high levels of effort toward organizational goals, conditioned by the efforts ability to satisfy some individual need. This study is concerned with how the use of Internet Technology can affect the association between both the quality of communication and the quality of relationship on the motivation of the distributor. Motivation was measured using a scale developed for this study to indicate the extent to which a distributor exerts effort toward accomplishing organizational goals. It is based on the work of Rosenbloom (2004) and was measured by seven items using a 5-point

35

Likert scale from 1 (strongly disagree) to 5 (strongly agree). This scale exhibited a Chronbach alpha of .94.

Distributor Performance Although distributor performance is a very dynamic and multidimensional construct, its role in the supply chain is essential in determining overall market performance for a firm. This study is concerned with how the use of Internet Technology can affect the influence of communication, quality of relationship, and motivation on the distributors performance. Distributor performance was measured for this study to indicate distributor ability to achieve market goals. It is based on those used by Gaski and Nevin (1985) and Bello and Gilliland (1997). It was measured using seven items in a 5-point Likert scale from 1 (strongly disagree) to 5 (strongly agree). It achieved a Chronbach alpha of .90.

Reliability and Validity Assessment A three-step approach developed by Joreskog & Sorbom (1993) was utilized to purify the measures used in this dissertation to establish a single measurement model that indicated the relationships among the constructs. First, any items with low factor loadings were eliminated as construct measures. These are indicated in the Appendix by an asterisk. Second, the overall fit of the measurement model was assessed using CFA fit indices. Third, reliabilities as well as convergent and discriminant validities of the measures were assessed. In order to develop a final measurement model, an iterative process was used in which overall model fit, normalized residuals, and variance extracted estimates were examined to purify the model of any underperforming indicators (cf. Anderson & Gerbing, 1988). measure to any substantial degree. A review of the modification indices in the measurement model revealed that no item loaded on a construct that it was not intended to

Measurement Model Results The final measurement model is presented in Tables 2 and 3. Table 2 provides

information concerning the overall model fit, the mean and standard deviation for each construct,

36

the internal consistency of the constructs, and the correlations between the latent constructs. Table 3 provides the standardized loading coefficients for the measurement model. Researchers have suggested that a variety of fit indices should be evaluated to establish the fit of a hypothesized model to the data (Anderson and Gerbing 1988). The current study utilized the comparative fit index (CFI) and the standardized root mean square residual (SRMR) advocated by Hu & Bentler (1999), the 2/df ratio, the DELTA2 index (Bollen, 1989), and the relative noncentrality index (RNI) used by McDonald & Marsh (1990). Gerbing & Anderson (1992) recognize the DELTA2, RNI, and CFI as the most stable and unbiased overall fit indices. According to Hu & Bentler (1999), CFI values that approach .95 for CFI are indicative of good model fit. CFI for this study is .97, which is above the standard accepted threshold. Hu & Bentler (1999) also indicated that values of SRMR .08 indicates good model fit. The present models SRMR of .045 is well within this accepted guideline. Both Bollen (1989) and Gerbing & Anderson (1992) assert that the DELTA2 index corrects for sample size distortions and claim scores of .90 as indicative of good model fit. Our present model exhibits a DELTA2 of .97, which is well above the accepted threshold of good fit. McDonald & Marsh (1990) claim that an RNI of .90 is also considered indicative of good model fit. The RNI of the present model is .97.

Table 1 Measurement Model Results: Model Fit, Internal Consistency, and Validity = 1027, p<.001 2/df ratio = 3.90 SRMR = .058
2

Overall Model Fit CFI = .97 Delta2 = ..97 RNI = .97 NNFI = .97 Internal Consistency Composite Reliability 1.0* .88 .91 .95 37 Average Variance Extracted N/A 70% 67% 83%

Construct Use of Internet Technology (UIT) Quality of Communication (QC) Cooperation (Coop) Trust (T)

Table 1 Continued Commitment (Commt) .91 71% Distributor Motivation (Mot) .94 75% Distributor Performance (Dperf) .90 74% Note: Since Use of Internet Technology is a formative scale, the reliability was set to 1.0 in keeping with the literature (e.g. Brady & Cronin, 2001) Intercorrelations Variable UIT QC Coop T Commt Mot DPerf -UIT .63 QC .69 .75 Coop .35 .52 .58 T .45 .59 .65 .59 Commt .64 .76 .87 .58 .64 Mot .53 .71 .74 .52 .61 .75 DP

Table 2 Measurement Model Results: Standardized Measurement of Coefficients and (t-values) Quality of Communication .84 (15.70) .74 (13.23) .83 (15.38) ------------------------Trust ------.84 (15.94) .96 (19.27) .94 (18.69) .91 (17.79) ----------------Cooperati on --------------.80 (8.55) .74 (8.21) .83 (8.67) .85 (8.76) .85 (8.79) ------Commitm ent ------------------------.72 (12.35) .93 (16.87) .89 (16.09) Motivati on ------------------------------Performance -------------------------------

Comm1 Comm2 Comm3 T1 T2 T3 T4 Coop1 Coop2 Coop3 Coop4 Coop5 Commt1 Commt2 Commt3

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Table 2 Continued Commt4 Mot1 Mot2 Mot3 Mot4 Mot5 Dperf1 Dperf2 Dperf3 --------------------------.82 (14.57) ----------------.75 (12.35) .93 (15.25) .89 (14.90)

.79 (9.49) ------.92(10.2 4) ----.84 (9.83) ------.89(10.1 0) ------.87 (9.99) ------------------------NOTE: All t-values are significant at the .001 level.

The 2 statistic evaluates whether the unrestricted population variance/covariance matrix of the observed variables is equal to the model-implied variance/covariance matrix (Mueller 1996, p.82). Because the 2 statistic is sensitive to sample size, Jreskog and Sorbom (1993) suggest that the chi-square value be compared to df in the model. Whereas no formal cutoff point has been developed in relation to the 2/df measure, lower than 5.00 and approaching 0.00 have been suggested as demonstrating acceptable fit (Mueller 1996). The measurement model demonstrated a significant 2 value (2 = 1027, p<.001) and a 2/df statistic of 3.90. The generally accepted threshold for incremental find indices is .90 (Marsh, Balla, and Hau 1996). The non-normed fit index was developed by Bentler and Bonnett (1980) to account for the degrees of freedom in both baseline and hypothetical models. As an acceptable model fit is demonstrated by values exceeding .90. In the current analysis, the non-normed fit index value was .97. Finally, comparative fit values above .95 are considered acceptable (Hu and Bentler 1998). The current study found a comparative fit index value of .97. In summary, these fit indices meet or approach the most stringent standards for acceptable model fit. An examination of all the fit indices utilized in this analysis suggest that the fit of the model is very good. Fornell and Larcker (1981) suggest that evidence of convergent validity is provided if the average variance extracted by a construct is greater than .50. This threshold suggests that the latent construct should account for more variance in the indicators than does measurement error.

39

The average variance extracted estimates for the studys variables are very high (Fornell and Larcker 1981), exceeding the recommended .50 threshold for validity for all six variables. Values for average variance extracted range from a low of .67 (cooperation) to a high of .83 (trust). Discriminant validity was also assessed using Fornell and Larckers (1981) criterion. These researchers argue for a comparison of the explained variance for a construct indicator to the shared variance between the construct and other variables in the model (Fornell and Larcker 1981). Evidence of discriminant validity is provided when the average variance extracted by the construct is greater than the shared variance between a construct and the other variables in the model. As shown in Table 4, most of the constructs used in this study meet this criterion for discriminant validity, with shared variance values ranging from .82 to .91. Although the comparisons of Cooperation to Communication and Cooperation to Motivation fail this test, all indicators loaded highly and significantly on their constructs. In addition, a second discriminant validity test was conducted based on Joreskog, (1971). In this test, the correlations between each latent construct was set to the value of one. The object of this iterative process is to determine if the value of 2 increases by more than 3.84. An increase in the 2 would indicate that the overall model fit is decreasing, which would be an indication the two constructs are discriminant. The results showed that all such pairwise analysis resulted in an increase of 2 , the smallest of which was 25.80. This is further evidence of discriminant validity. Fornell and Larckers (1981) procedure for calculating composite reliability was used to assess the composite reliability of each scale. Table 2 presents the reliability estimates using a measure of composite reliability based on the loadings in the measurement model (Bagozzi and Yi 1988). Construct reliabilities exceeding .80 are considered to be indicative of acceptable reliability (Fornell and Larcker 1981). Since Use of Internet Technology is a formative scale constructed by the author, its reliability was set at 1.0 in keeping with the literature (e.g. Brady & Cronin, 2001). The reliabilities of all six remaining measures easily exceed the recommended cutoff of .80, with only one, (Communication = .88) below .90. Further evidence of convergent validity is established by examining the t-values reported in Table 3. T-values for all of the measures are significant at the .001 level.

40

Hypothesis Testing

Analysis Plan Due to its proven benefits, structural equation modeling (SEM) has been chosen as the form of analysis for this dissertation. First, SEM deals with causal relationships. The primary purpose of this dissertation is to provide statistical support for the theoretical justification of its hypotheses. These hypotheses are stated in the form of a dependence relationship. Second, SEM is unique among analysis techniques in that it allows for the simultaneous investigation of multiple interrelated dependent relationships in a model (Hair, Anderson, Tatham, and Black 1998, pg. 584). Consequently, SEM is a useful technique when one dependent variable becomes an independent variable in a subsequent dependence relationship, e.g Quality of Communication in this dissertations study. Third, by using SEM a researcher can implement latent variables in the analysis. This provides a researcher with the ability to improve statistical estimation of the true structure coefficients. SEM incorporates measurement error into all analyses, thus providing correction for the unreliability of measures (Hair et al. 1998). Consequently, the power of all analyses is increased due to more accurate structural estimates. Anderson and Gerbing (1988) propose a two-step SEM approach. First, confirmatory measurement models are estimated and the reliability and validity of their measures assessed. Second, structural models representing the series of dependence relationships linking the model constructs are specified, the overall fit of the model is examined and the strength and significance of path loadings are assessed. As we have seen, Figure 1 suggests the significant relationships between the seven constructs in the model. The first objective of the current research is to provide evidence of acceptable overall model fit following the criteria provided in the preceding section. More specifically, this dissertation will examine the model on a hypothesis-by-hypothesis basis. As is true with all empirical studies, the relationships to be tested, the theoretical foundations for those relationships, and the size of the sample tend to dictate the type of data analysis used to test the hypotheses. Various SEM techniques were considered for testing the hypotheses. Of the SEM techniques, by far the most popular is the covariance-based method exemplified by the LISREL software program. One restriction of LISREL is that it makes the underlying assumption that the observed variables follow a normally distributed multivariate distribution and that observations

41

are independent from one another (Fornell and Bookstein 1982).

A further restriction of

LISREL is its sensitivity to sample size. It is generally accepted that the minimum sample size to ensure the appropriate use of MLE is 100 to 150 (Ding, Velicer, and Harlow 1995). However, 200 is proposed as a critical sample size from which to make accurate assessments of model fit (Hoelter 1983). The current dissertation has a sample size of 261, all of which were used in the analysis.

Distributor Motivation

Use of Internet Technology

Quality of Communication

Distributor Performance

Trust Cooperation

Commitment

Figure 1 Hypothesized Relationships

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Table 3 Standardized Loading Coefficients for the Measurement Model Variable Comm Trust Motivation DPerf Commt Coop ICR 0.88 0.95 0.94 0.90 0.91 0.91 AVE 0.70 0.83 0.75 0.74 0.71 0.67 1 0.84 0.59 0.84 0.77 0.63 0.86 2 0.91 0.64 0.59 0.69 0.63 3 4 5 6

0.86 0.81 0.70 0.94

0.86 0.68 0.82 0.84 0.73 0.82

Note: Square root of the AVEs are on the diagonal. N = 261

Table 4 Results of the Hypothesized Relationships Parameter Estimates .72 .08 .66 .93 .72 .07 .79 .04 .30 .31 .02 .14 .14 Significance t-value Level 13.45 .55 10.43 14.30 10.13 1.62 5.63 .810 1.53 1.79 .27 .61 2.15 *** ns *** *** *** * *** ns ns * ns ns * Support For Hypotheses Supported Not Supported Supported Supported Supported Not Supported Supported Not Supported Not Supported Supported Not Supported Not Supported Supported

Hypotheses H1 (+) H2 (-) H3a (+) H3b (+) H3c (+) H4a (-) H4b (+) H4c (-) H5 (-) H6 (+) H7a (-) H7b (-) H7c (+)

Path UIT QComm QComm Mot QComm T QComm Coop QComm Commt T Mot Coop Mot Commt Mot QComm DPerf Mot DPerf T DPerf Coop DPerf Commt DPerf

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* p < .05 (one tailed t-value: 1.645) ** p < .01 (one tailed t-value: 2.326) *** p < .001 (one tailed t-value: 3.09) ns not significant

Summary This chapter addressed all of the main aspects of this dissertations research design. Specific aspects that were explained and justified included the use of a field study, the sampling approach, the use of U.S. exporters as a source of data, questionnaire construction, and sources of measures. Validity and reliability of such measures were explained, as was the method of testing the hypothesized relationships. Lastly, analytical procedures and hypotheses testing methods were discussed. The following chapter will reveal all statistical results from the testing of the hypotheses and interpret the findings of this dissertation.

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CHAPTER 4 RESULTS

Chapter Introduction This dissertation was conducted to investigate the outcomes of Internet technology use on the relationship between a U.S. exporter and its foreign distributor. Specifically, it starts with an examination of the influence of Internet technology on the quality of communication between an exporter and its foreign distributor. It then considers the influence of the quality of

communication on the motivation of the foreign distributor and the relationship dimensions of trust, commitment, and cooperation between an exporter and its distributor. The effect of these relationship dimensions on distributor motivation are then analyzed. Lastly, this dissertation considers the effect of the quality of communication, the dimensions of the relationship, and distributor motivation on distributor performance. hypothesized relationships (Table 5). Support was found for 7 of these 13

A simplified path model derived from eliminating nonThis model illustrates the key findings of the

significant paths is presented in Figure 2.

dissertation as they concern the effects of Internet technology on antecedents of foreign distributor performance. Principal Research Findings Of the thirteen hypothesized relationships in this dissertation, support was found for seven. As was hypothesized, support was found for the direct and positive effect of Internet technology use on the Quality of Communication that exists between an exporter and its foreign distributor. However, that Quality of Communication was found to have a statistical

insignificant effect on foreign Distributor Motivation. Statistical support was also found for the effect of Quality of Communication on all three dimensions of Quality of Relationship between an exporter and its foreign distributor, i.e. Trust, Commitment, and Cooperation. Only one of 45

those relationship dimensions, Cooperation, was found to have a statistically significant effect on Distributor Motivation. Motivation, it was indicated, had a significant effect on Distributor Performance, but only at a lower level. Trust, however, did not have a significant effect on Distributor Performance. Of the remaining dimensions of the relationship, Distributor

Performance was found to be significantly affected by Commitment, but not Cooperation.

Hypotheses Testing Results

Hypotheses are either confirmed or disconfirmed based on whether the t-value associated with each path loading exceeds the criterion of practical significance for the .05 significance level (critical value = + 1.645). A one tailed t-test is deemed appropriate when there is a preferred direction in the relationship and is deemed to be more powerful statistically than a twotailed test (Churchill 1987). Therefore, t-values equal to or greater than 1.645 are significant and indicate that a specific hypothesis is confirmed by the data. The corresponding path estimates can be examined and interpreted. A representation of the hypothesized relationships between the constructs in this study is depicted in Figure 1, while Table 5 provides a summary of the path analysis results. R-square

values were calculated for endogenous constructs to evaluate the model. This statistic indicates the amount of variance explained by the model (Chin 1998). The overall model explained 89 per cent of the variance in Motivation, 86 per cent of the variance in Cooperation, 71 per cent of the variance in Distributor Performance, 52 percent of the variance in Quality of Communication, 52 per cent of the variance in Commitment, and 43 per cent of the variance in Trust, Hypothesis 1 examined the relationship between the use of Internet technology by an exporter and the quality of communication it shares with its overseas distributor. This

hypothesis suggests that there is a direct and positive relationship between the use of Internet technology and communication quality between an exporter and an overseas distributor. This relationship was found to be significant with a t-value of 12.18 (p .0001). Hypothesis 2 examined the relationship between the quality of communication shared by an exporter and its foreign distributor and the motivation of that distributor. This hypothesis suggested that there is a direct and positive relationship between communication and motivation. However, this relationship was not found to be significant since its t-value is a mere 0.45.

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Hypothesis 3a examined the relationship between the quality of communication shared by an exporter and its foreign distributor and the trust that exists in their relationship. This hypothesis suggests a direct and positive relationship between the quality of communication in an exporter-distributor relationship and the trust that they share in such a relationship. This relationship was found to be significant with a t-value of 9.33 (p .0001). Hypothesis 3b examined the relationship between the quality of communication shared by an exporter and its foreign distributor and the cooperation that exists in their relationship. This hypothesis suggests a direct and positive relationship between the quality of communication in an exporter-distributor relationship and cooperation. significant with a t-value of 7.53 (p .0001). Hypothesis 3c examined the relationship between the quality of communication shared by an exporter and its foreign distributor and the commitment that exists in their relationship. This hypothesis suggests a direct and positive relationship between the quality of communication in an exporter-distributor relationship and commitment. This relationship was found to be significant with a t-value of 9.70 (p .0001). Hypothesis 4a examined the relationship between the trust in the relationship between an exporter and its foreign distributor and the motivation of that same distributor. This hypothesis suggested a direct and positive relationship between trust and distributor motivation. Although the 1.62 t-value of this relationship is slightly below that which is required (1.65) for significance at the p .05 level, it is believed that a larger sample size would result in a significant t-value. Hypothesis 4b examined the relationship between the cooperation in the relationship between an exporter and its foreign distributor and the motivation of that same distributor. This hypothesis suggested a direct and positive relationship between cooperation and distributor motivation. This relationship was found to be significant with a t-value of 4.61 (p .0001). Hypothesis 4c examined the relationship between commitment in the relationship between an exporter and its foreign distributor and the motivation of that same distributor. This hypothesis suggested a direct and positive relationship between commitment and distributor motivation. This relationship was not found to be significant since its t-value was only .810. Hypothesis 5 examined the relationship between the quality of communication shared by an exporter and its foreign distributor and the performance of that distributor. This hypothesis suggests a direct and positive relationship between the quality of communication and distributor This relationship was found to be

47

performance. However, this relationship was not found to be significant since its t-value is only 1.53. Hypothesis 6 examined the relationship between the motivation of a foreign distributor and the performance of that same distributor. This hypothesis suggested a direct and positive relationship between motivation and performance. This hypothesized relationship was found to be significant at the p .05 level since its t-value was 1.79. Hypothesis 7a examined the relationship between the trust in the relationship between an exporter and its foreign distributor and the performance of that same distributor. This hypothesis suggested a direct and positive relationship between trust and performance. However, this relationship was not found to be significant since its t-value was only .74. Hypothesis 7b examined the relationship between the cooperation in the relationship between an exporter and its foreign distributor and the performance of that same distributor. This hypothesis suggested a direct and positive relationship between cooperation and distributor performance. This relationship was not found to be significant since its t-value was a mere .61. Hypothesis 7c examined the relationship between commitment in the relationship between an exporter and its foreign distributor and the performance of that same distributor. This hypothesis suggested a direct and positive relationship between commitment and distributor performance. This relationship was found to be significant with a t-value of 2.76 (p .01).

Table 5 Summary of Hypothesis Tests for the Theoretical Model of the Effect of Internet Technology on the Exporter Distributor Relationship
H1: Hypotheses In the relationship between the exporting firm and its foreign distributor, Use of Internet Technology is positively associated with the Quality of Communication In the relationship between the exporting firm and its foreign distributor, Quality of Communication is positively associated with Distributor Motivation In the relationship between the exporting firm and its foreign distributor, Quality of Communication is positively associated with Trust in the relationship In the relationship between the exporting firm and its foreign distributor, Quality of Communication is positively associated with Cooperation in the relationship. In the relationship between the exporting firm and its foreign distributor, Quality of Communication is positively associated with Commitment in Result Supported

H2:

Not Supported

H3a:

Supported

H3b:

Supported

H3c:

Supported

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Table 5 Continued
Quality of Communication is positively associated with Commitment in the relationship. In the relationship between the exporting firm and its foreign distributor, Trust is positively associated with Distributor Motivation. In the relationship between the exporting firm and its foreign distributor, Cooperation is positively associated with Distributor Motivation. In the relationship between the exporting firm and its foreign distributor, Commitment is positively associated with Distributor Motivation. In the relationship between the exporting firm and its foreign distributor, Quality of Communication is positively associated with Distributor Performance In the relationship between the exporting firm and its foreign distributor, Motivation is positively associated with Distributor Performance In the relationship between the exporting firm and its foreign distributor, Trust is positively associated with Distributor Performance In the relationship between the exporting firm and its foreign distributor, Cooperation is positively associated with Distributor Performance In the relationship between the exporting firm and its foreign distributor, Commitment is positively associated with Distributor Performance

H4a: H4b:

Not Supported Supported

H4c: H5:

Not Supported Not Supported

H6: H7a: H7b: H7c:

Supported Not Supported Not Supported Supported

Distributor Motivation

Use of Internet Technology

Quality of Communication

Distributor Performance

Trust Cooperation

Commitment

Figure 2 Refined Structural Model of the Effect of Internet Technology on Distributor Performance

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Summary

This chapter discussed all of the principal findings of the studys empirical analysis. Of the thirteen research hypotheses, statistical support was found for seven. The standards by which statistical support these hypotheses or their lack of such support were explained. The following chapter will interpret these results, offer managerial implications, indicated limitations to this study, and suggest directions for future work in this area of research.

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CHAPTER 5 DISCUSSION AND CONCLUSIONS

Chapter Introduction

This dissertation has developed and empirically tested a model of the effect of an exporters Internet technology use on its relationship with its overseas distributor and the distributors performance. The study investigated the influence of Internet technology on

communication and the consequent effect on the relationship, distributor motivation and distributor performance. The empirical study provides interesting results for discussion, while also extending prior research in the areas of Internet technology use, communication, and cooperation-motivation. Furthermore, these results contribute to practical managerial

understanding and application. However, the study is not without its limitations and several opportunities for future research. This chapter addresses each of these topics in several stages. The first section explains the results and the contributions made by this study. The second section discusses managerial implications. The third section discusses the limitations of the empirical study and the fourth section provides directions for future research.

The Effect of Internet Technology Use on the Quality of Communication.

While the influence of technology on communication has been explored before (e.g. Hoffman and Novak, 1996; Lewis and Talalayevsky, 1997), its effect on the communication between an exporter and its distributor has not been addressed. However, the finding of this

dissertation that the use of Internet technology by an exporter has a positive effect on the quality of communication it shares with its overseas distributor (H1) is not totally unexpected. This

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finding reveals a direct and positive relationship between the use of Internet technology and the communication that exists between an exporter and its overseas distributor. Not only is

communication between an exporter and a distributor important by itself, but the quality of these communications is also important. This study reveals that an exporter can augment this quality by using the Internet. Consequently, exporting firms should leverage the Internet in order to maximize the quality of their communications with their distributors. Since the exporter depends on its distributor for successful overseas operations, the ultimate performance of the firm in its foreign market should be positively affected. As a result of inherent international challenges, such as cultural differences, language barriers, different legal systems, time zones, etc., international business issues and intentions can be ambiguous, ill-defined, and a matter of perspective or opinion. The use of Internet technology by an exporter can avoid the ambiguity and uncertainty foreseen in previous works (e.g. Weick, 1979; Lengel and Daft, 1984). Indeed, information technology, such as the Internet, can

facilitate greater information sharing (Dwyer, Schurr, and Oh, 1987) and foster collaborative communication (Sriram and Stump, 2003). This dissertation extends prior research in the area of technologys effect on communication in that it addresses the effect of Internet technology on communication in an international setting, i.e. between an exporter and its foreign distributor.

The Effect of Quality of Communication on Distributor Motivation.

From the lack of support in this study for H2, it would seem that quality of communication does not lead to the motivation of a foreign distributor. However, this lack of support could merely emphasize the fact that it is not the quality of communication (i.e. speed & frequency) that motivates the distributor, but the content of what is being communicated. Speed & frequency do not matter if what is being communicated does not match the goals of the distributor, which are the basis of its motivation. Internet technology could then be seen as only a tool that can be used by an exporter to facilitate the conveyance of relevant information. As foreign entities, distributors must work in environments that are dynamic and turbulent, which can increase the need for relevant and accurate communication. Moreover, the foreign distributor is not an employee of the U.S. exporter, but rather an independent entity who might have numerous loyalties. Firms must learn what their distributors need and want.

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Although Internet technology may provide a frictionless business environment, unless what is communicated addresses the needs and wants for a foreign distributor, it will not result in the motivation of that distributor.

The Effect of Quality of Communication on the Quality of Relationship

The dimensions of relationship quality that were analyzed in this dissertation were trust (Larzelere and Huston, 1980; Morgan and Hunt, 1994), cooperation (Brown, 1979; Morgan and Hunt, 1994), and commitment (Siquaw, Simpson, and Baker, 1998; Morgan and Hunt,1994). All three of the paths leading from Quality of Communication to these dimensions were found to be significant, resulting in support for H3a, H3b, and H3c. Consequently, the quality of

communication between a U.S. distributor and its foreign competitor positively affects the trust, commitment, and cooperation within their relationship. Sriram & Stump (2003) emphasize that the quality of relationship with suppliers is positively affected by the frequency of communications resulting from IT investments. Support for H3a indicates that the quality of communication between an exporter and its foreign distributor can lead to trust within the relationship. Possibly, the quick and frequent exchange of information facilitates dispute resolution by allowing the expression and sharing of perceptions, thus leading to trust. Such a relationship could have a circular effect, i.e. as the quality of communication increases, trust with the relationship also increases, which can facilitate more communication (Anderson & Narus, 1984, 1990). These authors also emphasize that meaningful communication is required for trust between partners. IT increases the exchange of information, which can positively affect trust in the relationship. Support for H3b indicates that the quality of communication can allow for the effective and efficient exchange of information, which leads to increased understanding of how mutual efforts will increase the probability of success. Such an understanding of mutual benefit can lead to an increase in the amount of cooperation in the relationship. Support for H3c indicates that the quality of communication can allow for the effective transference of information that would lead to mutual goals. Once each party understands how their goals are interrelated and how the other party can help attain these goals, commitment to

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the relationship is directly affect. This commitment could be in the form of time, effort, and resources. These findings that the Quality of Communication has an effect on dimensions of the relationship between and exporter and its distributor indicate that communication serves as a mediator for the effect of Internet technology use on such a relationship. Consequently, it could be posed that the mere purchase of Internet technology systems would not affect the quality of relationship. However, it is the effective use of Internet technology as a communication and information tool that leads to a positive influence on the quality of relationship between an exporter and its foreign distributor.

The Effect of Quality of Relationship on Distributor Motivation

Of the three dimensions of relationship quality that were considered in this dissertation, only cooperation had a direct and significant affect on Distributor Motivation. This finding is not entirely unexpected, since in order to motivate a partner, a firm must cooperate to some degree with that partner in determining what goals appeal to the partner and what support it may need in achieving those goals (Rosenbloom, 2004). The lack of support for H4a suggests that Trust alone does not assist in the motivation of foreign distributors. The concept of trust itself can differ drastically across cultures. Even if Trust may exist, a party may not be willing or able to take action to help another achieve their goal. They may not share the same goals or views on how to achieve goals that they do share. There apparently is more to the motivation of foreign distributors that just trust. Support for H4b emphasizes that cooperation is closely tied with motivation. The two concepts share definitional terms. In order to be motivated to help someone achieve their goals, you must cooperate with them. This finding also indicates that Cooperation apparently

serves as a mediator for the effect that the Quality of Communication has on Distributor Performance. The lack of support for H4c suggests that commitment alone does not lead to the motivation of a distributor. Even though a firm may be committed to another, it may not have the desire or ability to act in a way that will motivate the other party. It may be that an additional

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element of relationship, such as trust or cooperation, is needed to work with commitment in order to result in motivation.

The Effect of Quality of Communication on Distributor Performance

Although it is considered to be the glue that holds together a channel of distribution (Mohr & Nevin, 1990), the quality of communication apparently does not have a direct effect on performance, specifically that of a foreign distributor. The lack of support found by this

dissertation for H5 may indicate that the quality of communication between an exporter and foreign distributor alone does not affect performance. As mentioned before with H2, the speed and frequency with which an exporter communicates with its distributor does not necessary lead to the intended effect. However, the content of what is being communicated may prove to be more important in leading to distributor performance. It may be that relevant and accurate information is what affects distributor performance. From the findings it can be seen that there is no direct effect of Quality of Communication on Performance. Therefore, it appears that for Quality of Communication to have any affect on Distributor Performance, it must be mediated by either Cooperation through Distributor Motivation or by the level of Commitment in the relationship. Information alone does not increase performance. Such information obtained via communication quality must lead to an intervening variable before affecting Distributor Performance. An example of such a variable would be the increase of cooperation in the relationship from the consequent recognition of mutual goals and interests. This recognition of mutual goals and benefits would then assist in Distributor Motivation, which would lead to an increase in Distributor Performance. As indicated in H7c, another intervening variable for the Quality of Communications affect on Distributor Performance would be the level of Commitment in the relationship. The strategic importance of Commitment is emphasized in this study since it is the only dimension of Quality of Relationship that has a direct effect on Distributor Performance. Again, it is possible that through effective and efficient exchange of information between an exporter and its distributor, the exporter can determine that the distributor is warrants commitment of time, money, effort, etc. The dedication of such resources could then lead to an increase in Distributor Performance.

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Such an indirect affect on performance has been established before.

Regarding

Information Technology itself, which includes Internet Technology, Chen and Zhu (2004) refer to IT as an enabler that allows firms to achieve more efficiency in their business processes. It is only through this indirect link that IT can affect firm performance (McKeen and Smith, 1993).

The Effect of Distributor Motivation on Distributor Performance

The finding of support for H6 quite simply suggests that motivated distributors will perform. In order to accomplish motivation, an exporter must first determine distributor

incentives. These incentives come from the Quality of Communication through Cooperation. A distributor who realizes that he/she will be adequately and fairly compensated for successful performance will strive to succeed at the task given to it by the exporter. For a distributor, or any firm, to succeed, it must feel confident that its efforts will result in compensation that address its needs and wants. Consequently, a U.S. exporter who knows and understands the needs and wants of its foreign distributor, can successfully achieve performance in the market via that distributor by satisfying those needs and wants. This finding also indicates that Distributor Motivation may also serve as a mediator for the effect that Cooperation and the Quality of Communication have on the Distributor Performance.

The Effect of Quality of Relationship on Distributor Performance

Of the relationship dimensions used in this dissertation, only commitment (Siquaw, Simpson, and Baker, 1998; Morgan and Hunt,1994) was determined to have a direct and positive effect on the performance of the foreign distributor. Cooperation, on the other hand, did not have a significant direct effect, however it did have an indirect effect via Distributor Motivation. Such findings emphasize the multiple dimensionality of a relationship. The lack of support for H7a suggests that trust alone does not affect Distributor Performance. Previous studies have noted that such relational elements as trust and commitment are necessary for closer interfirm relationships (e.g. Morgan and Hunt, 1994). A party must also be motivated and able to perform, i.e. willing and able. Although trust is very important in a relationship, it alone cannot lead to performance. Indeed, in many business relationships the

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parties involved do not trust each other completely. As can be seen from the slow adoption of such business practices as just-in-time delivery and relationship management in the United States, because of the traditional arms-length dealings, some firms are reluctant to fully disclose confidential information to a partner for fear of that partner divulging such information to a competitor. The lack of support for H7b indicates that cooperation alone does not lead to Distributor Performance either. For smaller firms that do not represent themselves overseas and must hire a local representative, there must be more than the mere recognition of mutual goals and the agreement to work together. Many alliances and joint efforts that are founded on the realization of mutual benefit can fail. Performance in a dynamic foreign environment requires effective commitment of resources. Support for H7c indicates that the commitment of time, resources, effort, etc. leads to distributor performance. It is the belief that a relationship is important enough to extend whatever effort necessary to maintain it. Such effort would undoubtedly include taking the position to address the needs and wants of a business partner, e.g. a foreign distributor. Morgan & Hunt (1994) indicate that commitment is a key element in a relationship because it assists in the production of outcomes that promote efficiency, productivity, and effectiveness. If an

exporter commits resources, time, effort, etc. to the relationship it shares with its foreign distributor, it is basically providing that distributor with the tools for success. Without such tools, it would be much more difficult for the distributor to perform. Perhaps Commitment is the most important dimension of a relationship with a foreign distributor. Perhaps in such a competitive and dynamic environment, what truly matters is the availability of resources or tools to do the job. Although trust may contribute to the reduction of transaction costs, without the availability of needed resources in the relationship, performance may not be attained. Likewise, although cooperation indicates a willingness to work toward mutually beneficial goals, the ability of actually accomplishing those goals may depend on the availability and use of practical resources. Commitment indicates a recognition that a relationship or an arrangement is important enough to maintain. A partnership with such commitment can lead to an ability to overcome other deficiencies, such as a lack of trust and cooperation. Findings of this study also indicate

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that Commitment may serve as a mediator for the effect that the Quality of Communication has on Distributor Performance.

Managerial Implications

The main contact that U.S. exporters have with their overseas distributors is not through face-to-face meetings. Such communication would entail frequent overseas travel and would be cost prohibitive. Consequently, technology plays a significant role in the day-to-day dealings and communication between exporting parties. As communication technology has evolved, exporters and distributors have relied on the telephone, the telex, the fax machine, and now the Internet, in order to remain competitive. This section will discuss the managerial implications

of the Internets role in the relationship between an exporter and its foreign distributor.

Use of Internet Technology Although it was modeled as only an antecedent to Quality of Communication in this study, the effect of Internet technology in todays international market is understood. However, from this mediating role of Quality of Communication, it is evident that although Internet technology provides an advantage to managers, such an advantage is achieved only through the use of Internet technology as a tool or an enabler. Therefore, it must be used to improve or enable other functions or processes before it can affect anything critical, such as performance. This simple fact should emphasize to management that the mere investment in technology does not lead to desirable outcomes. Technology such ass the Internet is only the means to that end.

Quality of Communication Perhaps most important, the findings of this dissertation revealed that the Quality of Communication shared between an exporter and distributor is a significant antecedent of Distributor Performance, but only through the intervention of other variables. Communication, via the use of Internet technology, apparently affects trust, cooperation, and commitment in a relationship. However it is only through cooperation and commitment that communication positively affects performance. This underscores the value of communication to an exporting firm, by emphasizing that merely communication between it and its overseas representative will

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not lead to performance in the marketplace unless it is substantive enough to affect these relationship qualities. Mere information exchange is not enough when faced with overseas partners and markets. This is also revealed by the fact that communication had no direct effect

on distributor motivation.

Quality of Relationship Although trust, cooperation, and commitment are all important qualities in relationships, in this study only cooperation and commitment lead to Distributor performance. Apparently, exporting firms should concern themselves more with a distributors cooperation and commitment, as oppose to trust. Although trust may be important in reducing transaction costs, it appears that exporters are better off to determine a distributors needs and goals, which would be the basis of cooperative efforts and motivation of a partner. Moreover, commitment in the relationship was found to have a significant direct effect on the performance of a distributor. This underscores the critical role of commitment as a mediating variable in the relationship between Quality of Communication and Distributor Performance. In other words, exporting firms should use Internet technologys communication tools to establish or improve the level of commitment in its relationship with its distributor. Once a firm

commitment is established, a distributor may have better opportunities to perform. Thus, the role of commitment is critical in the relationship between an exporter and its foreign distributor.

Distributor Motivation According to this study, distributors are directly motivated only by the level of cooperation in the relationship. To an export manager this means that the firm would benefit from using the Internet to determine what goals it shares with the particular distributor. Once a firm knows what are common objectives and goals, which is the basis of cooperation, it can then use that communication and cooperation to ascertain what are the needs and wants of the distributor, which is the basis of its motivation to perform.

Distributor Performance From this studys results it appears that important antecedents to a distributors performance are the distributors motivation and commitment in the relationship. It comes as no

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surprise that motivation, i.e. willingness and desire, has an almost intuitive affect on outcome. Neither individuals or organizations can perform as well if they are not willing to perform or have the desire to perform better. Exporters should then utilize Internet technology to achieve the cooperative effort with their distributor that would result in a desire by the distributor to improve performance. Such desire or motivation is driven by determining the individual needs or desires of the distributor, such as money, recognition, increase in territory, etc. In addition, exporters must then leverage the Internet to increase communication quality between it and its distributor in order to determine if the relationship is worth maintaining, i.e. commitment. Once it is determined that both the firm and the distributor are committed to maintaining a working relationship, both the exporting firm and the distributor can allocate more resources, e.g. funds, time, support, etc., to increase distributor performance in the market. Overall, the findings of this dissertation emphasize the pervasive effect of information technology, particularly that of the Internet. As Mick and Fournier (1998) point out, No one eludes technology. Although previous works refer to IT as an enabler (e.g. Chen and Zhu, 2004), the present work emphasizes that information technologys enabling or

empowerment is not a guarantee of performance. Although the use of Internet technology strongly influences all dimensions of the relationship between an exporter and its distributor through the Quality of Communication, that relationships affect on Distributor Motivation and Performance is not automatic. From

Trusts weak effect (.07, 1.62) on Motivation and its insignificant effect on Distributor Performance, this study suggests that Trust may not be as important of an antecedent to performance as has been previously thought. Apparently, when IT, such as the Internet, is involved, the constructs of Cooperation and Commitment are more important to performance. It could be that the impersonal nature and quality of the Internet weakens Trusts effect, thereby allowing Cooperation and Commitment to compensate in the relationship. Consequently,

exporters cannot take Trust for granted in their partner relationship management with foreign distributors because actual cooperation with the distributor and commitment to the relationship may be more important.

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Limitations of the Dissertation

Although this dissertation reveals insight into both theoretical and managerial implications of the hypothesized relationships, it must be read in light of certain limitations. Some of these limitations apply to all studies, while some limitations are specific to this study. These limitations include the design of the research, common method variance, and social desirability. First, while the survey obtained information from a variety of U.S. exporters, that information was self-reported data supplied by the U.S. exporting firm only. A more accurate picture could have been obtained by including data from the foreign distributors used by those U.S. exporters. However, obtaining data from overseas sources is not only more expensive, but more difficult. In addition, although the common relationship of respondents was exporting manufacturers, the nature of the relationships between constructs could be affected by the contextual differences of the specific industry in which the responding exporter operated. Second, the chance of common method variance was not completely eliminated from this dissertation. While measures were taken in survey design to limit the effect of common method variance, export managers were the only respondents in this study. Therefore, the problem of common method variance remains. discussed in the next section. Third, a study such as this can be susceptible to the effects of social desirability bias in the completion of the self-reported items that are used. Specifically, respondents may have been inclined to answer the questions regarding their firms relationship and performance in a socially desirable way. As an example, respondents may have been inclined to over-estimate the degree of cooperation received from their distributor and the results of the distributors efforts in the selected market. Numerous assurances of anonymity were provided in both the cover letter and the survey instrument itself. Respondents were also assured that the study results would only be published in aggregate form. Fourth, regarding the standard utilized to indicate the level of Distributor Performance, a more objective form of measurement is warranted. Although the scales used in this study were obtained from proven works by noted scholars and although these scales exhibited face validity and good reliability, they were notably subjective measures (e.g. Our distributor is successful in This limitation leads to future research possibilities

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generating profits for out firm.). A more accurate indication of performance in the foreign market would be obtained from objective indicators such as actual sales, return on investment (ROI), percentage change in market share, etc.) Lastly, as with many field studies, this dissertation was cross-sectional in nature. Such a design allows only for a view of hypothesized relationships at one point in time. More accurate and meaningful results could have been obtained if information could have been obtained at multiple points in order to determine if results would be reliable over time.

Recommendations for Future Research

Overseas distributors play an extremely important role in the exporting process for U.S. manufacturers. In addition, use of Internet technology by U.S. exporters presents

communication opportunities that were not possible under the old methods of postal mail, telex, telephone, and fax machine. While contributing to the body of research that has already been conducted in the field of exporting, this dissertation introduces topics for future research on the exporter distributor relationship. Further interesting analysis could be conducted by considering the environmental contexts in which the data was collected. Although the effects of mediating variables were considered, moderating effects were not. Baron and Kenny (1986) define such a variable as a qualitative or quantitative variable that affects the direction and/or strength of the relation between a predictor and a criterion variable. Consequently, moderation implies that the causal relation between two variables changes as a function of the moderator variable. Variables on the micro-level that might affect the strength and/or direction of relationships between an exporter and its foreign distributor include firm age and size, and resources available to the firm. On the macro-level, the moderating effect of variables such as the type of industry in which the firm operates and the overall state of the economy would be of interest in this field of research. This dissertation measured the use of Internet technology in a collective sense, however further study could differentiate between different Internet applications, such as intranet, extranet, video conferencing, etc. Plus, a comparison of exporting firms according to size, expenditures made on Internet technology, and the amount of export success could reveal interesting relationships between the size of exporters and their success in the new Internet

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Economy, i.e. whether the Internet truly levels the playing field. Such research would provide insight into the extent to which Internet technologies actually assist SMEs in relation to larger firms when those larger firms receive the similar benefits from utilizing the same technology. Since Commitment was the only Quality of Relationship dimension to have a direct effect on Distributor Performance, a closer look at this construct is warranted. This finding

reinforces that of Morgan and Hunt (1994) where commitment was found to be central to all relational exchanges between a firm and its partners, e.g. its most important distributor in its most important foreign market. It is this commitment among exchange partners that leads to achieving valuable outcomes. However, what specific type of commitment leads to Distributor Performance? Is Distributor Performance influenced by the commitment of financial resources? Does the allocation of more time to work with a foreign distributor lead to its performance? Such analysis might lead to insight as to what a U.S. exporter must expend, or commit, to the relationship in order for it to lead to success in the market. Furthermore, a closer look at the mediating role of Commitment on the relationship between Quality of Communication and Distributor Performance would lead to insight into how communication via the Internet can be leveraged to obtain maximum results from the market. Furthermore, it would be interesting to model the relationships of this dissertation in the same manner as used in Morgan and Hunt (1994), i.e. model Commitment and Trust as antecedents to Cooperation as opposed to independent constructs. Not only would such research provide more insight into Morgan and Hunts original findings, it would also present the opportunity to determine if such findings can be replicated under other circumstances and conditions, such as the exporter distributor relationship. As previously mentioned, safeguards against common method variance were not strictly taken in this dissertation. Data was collected only from U.S. exporters. Although there might be confidentiality and expense issues, in follow-up studies, responses to questions measuring constructs of interest could be obtained from the foreign distributors themselves. By combining these distributor responses with those of the exporter, a clearer and more accurate measurement of the constructs of interest could be made. Lastly, any study that entails an international element cannot ignore the consideration of the moderating effects of culture. Such analysis could lead to greater understanding as to cultures role in the affect that Quality of Communication has on the chosen elements of Quality

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of Relationship, i.e. Trust, Cooperation, and Commitment. Researchers have established that trust can lower transaction costs in uncertain environments (Dore, 1983; Noordewier, John, and Nevin, 1990) and that trust can differ according to culture. Does culture influence Internet technologys affect on Trust? Does the impersonal nature of technological communication make a difference to the development of a relationship between a U.S. exporter and a distributor from a more traditional culture? Such insight would lead to a better understanding of technologys role in developing working relationships with foreign partners. However, insight into such

relationships would not only provide a means to increase export performance, but would also assist U.S. firms in developing a strategic approach for survival in an increasingly global market.

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APPENDIX A Measurement Scales __________________________________________________________________ Construct (composite reliability CR) Item (standardized loading coefficient from CFA analysis in LISREL8) (Source) __________________________________________________________ Note: All scales are 5-point Likert scales; Use of Internet Technology entailed 1 (Never) to 5 (Always); all other scales entailed 1 (Strongly Disagree) to 5 (Strongly Agree). * indicates items removed in scale purification process. Use of Internet Technology (CR = N/A; formative) Placing/receiving orders for your product. Verification of product order status. *Qualification of customer credit-worthiness. Exchange of advertising copy or ideas. Regular communication and/or announcements. Providing background of history information on our firm. Making product specification/features available. Making business forms available (e.g. invoices). Providing access to market research information. *Reciprocal homepage links. Sharing access to databases. Examination/verification of inventory status. Conducting real-time meetings/conferences (e.g. web conferencing). Displaying/providing graphics or visuals of our product(s). Calculation/negotiation of product pricing. Organization/confirmation of product logistics/delivery. Providing after-sales service and/or technical support. Exchanging sales lead information. Providing product catalogs online. Exchanging target market information (i.e. intelligence). Providing training/product education information. (author constructed) Quality of Communication (CR = .88) Our primary distributor communicates well his/her progress towards performance goals. (.84) Our primary distributor communicates with us frequently. (.74)

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*Our primary distributor provides us with accurate information. Our primary distributor provides us with detailed information. (.83) *Our primary distributor responds quickly to our enquiries. *Our primary distributor provides us with market information even though we do not request it. (Anderson, Lodish, and Weitz (1987); Morgan and Hunt,1994) Distributor Motivation (CR = .94) *In selling our product to existing customers, our distributor works hard. *Our distributor strives to learn how to sell our product better. In advertising our product, our distributor works actively. (.79) Our distributor works diligently to provide after-sales support for our product. (.92) In collecting market information for our product, our distributor is persistent. .(.84) Our distributor is enthusiastic in cultivating new customers for our product. (.89) To achieve predetermined objectives and goals in the market, our distributor works energetically. (.87) (author constructed) Trust (CR = .95) *Our primary distributor cannot be trusted at times. Our primary distributor can be counted on to do what is right. (.84) Our primary distributor has high integrity. (.96) The relationship with our distributor is characterized by high levels of trust. (.94) Our firm and our distributor generally trust each other that each will stay within the terms of our agreement. (.91) *Our firm and this distributor are generally skeptical of the information provided to each. (Larzelere and Huston, 1980; Morgan and Hunt, 1994) Cooperation (CR = .91) Our distributor cooperates in new account development. (.80) Our distributor cooperates in local/regional cooperative advertising. (.74) Our distributor cooperates in the maintenance of inventory/supply levels. (.83) Our distributor cooperates in customer service. (.85) Our distributor cooperates in determining performance goals. (.85) *Our distributor cooperates in strategic planning. (Brown, 1979; Morgan and Hunt, 1994) Commitment (CR = .91) *We defend our primary distributor when outsiders criticize their company. *We are patient with this distributor when they make mistakes that cause us trouble. We are willing to dedicate whatever people and resources it takes to grow sales for this distributor. (.72) The relationship that our firm has with our primary distributor is something to which we are very committed. (.93)

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The relationship that our firm has with our primary distributor is something we intend to maintain indefinitely. (.89) The relationship that our firm has with our primary distributor deserves our firms maximum effort to maintain. (.82) (Siquaw, Simpson, and Baker, 1998; Morgan and Hunt,1994) Distributor Performance (CR = .90) *Our distributor meets his/her sales target/goals. *Our distributor meets his/her new account development goals. *Our distributor is successful in maintaining personal contact with our office. * Our distributor is successful in providing service to customers in the market. Our distributor is successful in providing our company with market information, including that of our competitiors. (.75) Our distributor is successful in generating profits for the firm. (.93) Our distributor is successful in maintaining market share for the firm. (.89) (author-constructed based on Gaski & Nevin, 1985 and Bello & Gilliland, 1997)

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APPENDIX B Cover Letter/Informed Consent

January , 2005

Dear U.S. Exporter: I am a doctoral student at Florida State University and I am conducting research for my dissertation regarding the use of the Internet by U.S. exporters. In return for your participation, I will gladly share with you a summary of the results of this research, PLUS make a $5.00 contribution to the charity of your choice. The survey takes about ten (10) minutes to complete. Your answers will remain strictly confidential. To receive a copy of the study results, please complete the survey and return it with your business card in the enclosed postage-paid envelop. Your input is very important and will contribute to the understanding of an area that greatly affects the exporting potential of U.S. firms. Please complete the survey and return it by Wednesday, March 16. If you have any questions, please contact me (tel: 850/644-4417; dbk9613@cob.fsu.edu) or my professor, Dr. Gary Knight (tel: 850/644-1140; gknight@cob.fsu.edu). Thank you for taking the time from your busy schedule to assist with this study. Sincerely,

David B. Kuhlmeier Ph.D. Candidate College of Business Florida State University Tallahassee, FL 32306-1110

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APPENDIX C Survey
A SURVEY OF U.S. EXPORTERS

The purpose of this questionnaire is to assist in better understanding the use of Internet technology by Americas leading exporting firms. Your response is anonymous and will be used in aggregate form for academic and teaching purposes only. Please complete the survey yourself or entrust it to the manager most knowledgeable about your firms day-to-day export activity.

In gratitude for completing and returning this questionnaire, I will: Provide you a summary of the study results, and Contribute $5.00 to the charity of your choice. Please choose one from among the following: [ ] American Cancer Society [ ] American Heart Association [ ] Special Olympics [ ] Other (specify) ________________________________________________________________ INSTRUCTIONS Using last fiscal year as a reference, please respond to all questions by writing an answer, checking a box, or circling a number. Please use your actual perception and not your desired perception. In answering, consider your firm as a whole unless you are a subsidiary or division of a larger firm. If a subsidiary or division, consider the situation and activities of your unit/division only. Please return your completed questionnaire in the enclosed postage-paid envelope by Wednesday, March 9. To receive a copy of the results summary, please attach your business card in the space to the right. Thank you for participating!

Attach Business Card Here

David B. Kuhlmeier College of Business Florida State University

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International Business Program FLORIDA STATE UNIVERSITY Tallahassee, FL 32306-1110 Tel: 850-644-4417 or 850-644-1140 Email: dbk9613@cob.fsu.edu

We first want to understand the general background of your firm.

How many full-time employees work at your firm _________ In how many foreign countries do you sell your product(s)? _________ countries In what year did your company first get involved in exporting? (Write in year) __________ International sales (any sales made outside the USA) make up about what percent of your total sales? _________ % Last year, what was your approximate total company sales? $________________ million.

In responding to all remaining questions, please think in terms of your primary export product and your primary export market. This is the product that generates the most sales to your most important foreign market. These will be referred to as this product and this market. The market for this product is __________________________________________ (Write in the name of a single country.) Please provide a brief description of this product: _____________________________________________________________________________________________ _____________________________________________________________________________________________ _________________________________________________________ Which of the following best describes the nature of this product? (Check a box): [ ] Industrial product (bought by other firms for further processing or for use in a business) [ ] Consumer product (bought by final consumers for personal consumption) Sales of this product to its primary export market account for about what percent of your firms total sales? _________% Which of the following best characterizes the distribution channel you are using for this product in its primary export market? (Choose one; to be referred to as distributor hereafter) [ ] Independent distributor [ ] Agent [ ] Sales rep [ ] Joint venture partner [ ] Branch office owned by your firm [ ] Other (specify)_______________________________________

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All of the remaining questions in this survey refer to this distributor. Please respond hereafter in reference to this distributor.

In the following section, Internet technology refers to any Internet-based technology, including email, websites, intranet/extranet, electronic data exchange, web camera, etc. To what extent do you utilize Internet technology in conducting the following tasks with this distributor in this market for this product? (circle a number) Placing/receiving orders for your product Verification of product order status Qualification of customer credit-worthiness Exchange of advertising copy or ideas Regular communication and/or announcements Providing background or history information on our firm Making product specification/features available Making business forms available (e.g. invoices) Providing access to market research information Reciprocal homepage links Sharing access to databases Examination/verification of inventory status Conducting real-time meetings/conferences (e.g. video conferencing) Displaying/providing graphics or visuals of the product Calculation/negotiation of product pricing Organization/confirmation of product logistics/delivery Providing after-sales service and/or technical support Providing or exchanging sales lead information Providing product catalogs online Providing or exchanging target market information Providing training/product education material

Never 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2

Sometimes 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4

Always 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5

Regarding communications with this distributor in this market, to what extent do you agree or disagree with the following statements? (circle a number) Our primary distributor keeps us informed of new developments in this market. Our primary distributor communicates well his/her progress toward performance goals. Our primary distributor communicates with us frequently. Our primary distributor provides us with accurate information.

Strongly Disagree 1 1 1 1 2 2 2 2

Neutral 3 3 3 3 4 4 4 4 5 5 5 5

Strongly Agree

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Our primary distributor provides us with detailed information. Our primary distributor responds quickly to our enquiries. Our primary distributor provides us with market information even though we do not request it.

1 1 1

2 2 2

3 3 3

4 4 4

5 5 5

Regarding the trust you have in this distributor, to what extent do you agree or disagree with the following statements? (circle a number) Our primary distributor cannot be trusted at times. Our primary distributor can be counted on to do what is right. Our primary distributor has high integrity. The relationship with our distributor is characterized by high levels of trust. Our firm and our distributor generally trust each other that each will stay within the terms of our agreement. Our firm and this distributor are generally skeptical of the information provided to each other.

Strongly Disagree 1 1 1 1 1 1 2 2 2 2 2 2

Neutral 3 3 3 3 3 3 4 4 4 4 4 4

Strongly Agree 5 5 5 5 5 5

Regarding your commitment to this distributor in this market, to what extent do you agree or disagree Strongly with the following statements? (circle a number) Disagree We defend our primary distributor when outsiders criticize their company. We are patient with this distributor when they make mistakes that cause us trouble. We are willing to dedicate whatever people and resources it takes to grow sales for this distributor. The relationship that our firm has with our primary distributor is something we are very committed to. The relationship that our firm has with our primary distributor is something we intend to maintain indefinitely. The relationship that our firm has with our primary distributor deserves our firms maximum effort to maintain. 1 1 1 1 1 1 2 2 2 2 2 2

Neutral 3 3 3 3 3 3 4 4 4 4 4 4 5 5 5 5 5 5

Strongly Agree

Regarding the cooperation you receive from this distributor in this market for this product, to what extent do you agree or disagree with the following statements? (circle a number) Our distributor cooperates in new account development Our distributor cooperates in local/regional cooperative advertising Our distributor cooperates in the maintenance of inventory/supply levels Our distributor cooperates in customer service Our distributor cooperates in determining performance goals Our distributor cooperates in strategic planning

Strongly Disagree 1 1 1 1 1 1 2 2 2 2 2 2

Neutral 3 3 3 3 3 3 4 4 4 4 4 4

Strongly Agree 5 5 5 5 5 5

Regarding the motivation of this distributor in this market for this product to what extent do you agree or disagree with the following statements? (circle a number)

Strongly Disagree

Neutral

Strongly Agree

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In selling our product to existing customers, our distributor works hard. Our distributor strives to learn how to sell our product better. In advertising our product, our distributor works actively. Our distributor works diligently to provide after-sales support for our product. In collecting market information for our product, our distributor is persistent. Our distributor is enthusiastic in cultivating new customers for our product. To achieve predetermined objectives and goals in the market, our distributor works energetically.

1 1 1 1 1 1 1

2 2 2 2 2 2 2

3 3 3 3 3 3 3

4 4 4 4 4 4 4

5 5 5 5 5 5 5

Regarding the performance of this distributor in this market for this product, to what extent do you Strongly agree or disagree with the following statements? (circle a number) Disagree Our distributor meets his/her sales targets/goals. Our distributor meets his/her new account development goals. Our distributor is successful in maintaining personal contact with our office. Our distributor is successful in providing service to customers in the market. Our distributor is successful in providing our company with market information, including that of our competitors. Our distributor is successful in generating profits for the firm Our distributor is successful in maintaining market share for the firm 1 1 1 1 1 1 1 2 2 2 2 2 2 2

Neutral 3 3 3 3 3 3 3 4 4 4 4 4 4 4

Strongly Agree 5 5 5 5 5 5 5

To what extent do you use the following Internet technologies in your dealings with this distributor? (circle a number) Email (including Intranet and Extranet) Webpage links Video camera/teleconferencing Virtual graphics Shared databases

Never 1 1 1 1 1 2 2 2 2 2

Sometimes 3 3 3 3 3 4 4 4 4 4

Always 5 5 5 5 5

Thank you very much! Please return your completed questionnaire in the enclosed postage-paid envelope

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APPENDIX D FSU Human Subjects Committee Approval Letter

74

75

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BIOGRAPHICAL SKETCH David B. Kuhlmeier Originally from Iowa, David received his B.A. in Public Administration from Drake University in Des Moines, IA. He received his Master of Arts in International Affairs from Florida State University and a Master of International Management from the American Graduate School of International Management in Glendale, AZ. After working 3 years for an international freight forwarder in New York City, David joined the Division of International Trade Development of the Florida Department of Commerce (FDOC). During his 6+ years with the FDOC he ran its London Office to promote trade and investment between Europe and Florida. David then joined the U.S. Dept. of Commerces International Trade Administration, where he worked in its Houston District Office and then served as Director of the Charleston, SC Branch Office. David earned his Ph.D. in Marketing from Florida State University where he was awarded the Universitys prestigious Outstanding Teaching Assistant Award. His areas of

emphasis are international business, supply chain/B2B, and electronic commerce. His academic research has been published in business journals and presented at international professional conferences. David has three young children with whom he likes to spend time, he enjoys outdoor pursuits such as sports and hunting, and likes to be active in community volunteer organizations.

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