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How does the distributors’ “banding together” affect contract governance in marketing channels?

Chao Feng (Department of Marketing, School of Management, Xi’an Jiaotong University, Xi’an, China and Department of Marketing, College of Business, City University of Hong Kong, Kowloon Tong, Hong Kong)
Guijun Zhuang (Department of Marketing, School of Management, Xi’an Jiaotong University, Xi’an, China)
Hui Chen (Department of Marketing, School of Management, Xi’an Jiaotong University, Xi’an, China)
Daxian Hu (Department of Marketing, School of Management, Xi’an Jiaotong University, Xi’an, China)

Nankai Business Review International

ISSN: 2040-8749

Article publication date: 5 March 2020

Issue publication date: 23 November 2020

Abstract

Purpose

Based on social network theory and the literature of contract governance, the purpose of this study is to explore how distributors’ “banding together” (network intensity) affects contract governance (detailed contracts), which, in turn, influences channel conflict and simultaneously tests the moderating effect of network centrality.

Design/methodology/approach

The authors collect the data from the side of 288 manufacturers.

Findings

This study finds that, first, distributors’ network intensity positively affects detailed contracts between manufacturers and distributors; second, detailed contracts, in turn, declines channel conflict; and third, network centrality will weaken the positive influence of network density on detailed contracts. In addition, an ex post analysis finds that detailed contracts play a negative mediating role between distributors’ network density and channel conflict and this negative mediating effect would be weakened by distributors’ network centrality.

Originality/value

The current study not only helps to make up for the shortcomings of using the dyadic analysis paradigm to analyze channel behavior but also helps manufacturers to understand and respond to the phenomenon of distributors’ “banding together” comprehensively and deeply.

Keywords

Acknowledgements

This work has been supported by the National Natural Science Foundation of China (Grant No. 71472149 and 71132005). The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Citation

Feng, C., Zhuang, G., Chen, H. and Hu, D. (2020), "How does the distributors’ “banding together” affect contract governance in marketing channels?", Nankai Business Review International, Vol. 11 No. 4, pp. 635-652. https://doi.org/10.1108/NBRI-12-2019-0075

Publisher

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Emerald Publishing Limited

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