The link between trust and distrust in SME export-import relationships

This study seeks to understand the link between trust and distrust in the SME exporter-importer relationships. Although considerable research has explored the role of trust in inter-firm relationships, especially in developed economies, scholars have devoted less attention to understand how trust and distrust together influence business relationships in transitional market contexts. The political and economic reforms in transitional economies in recent years have provided rich opportunities for SMEs to emerge and develop through internationalization. Since the institutional systems in these economies are mostly underdeveloped, SMEs rely heavily on trusted trading partnerships. Trust is defined as “the overall perception of an individual with regards to the credibility and benevolence of the group of people representing the partner firm in the relationship” (Jiang et al., 2011, p. 320) and its importance has grown over the last decade in international business (Gaur et al., 2011). In this new business setting there is a need for small-to-medium sized enterprises (SMEs) from transitional economies, many of which are undergoing liberalisation, to take advantage of new business ventures and various other opportunities by establishing partnerships with foreign partners (Bachmann and Inkpen, 2011). This is because inter-firm relationships enhance SMEs’ ability to compete successfully in the marketplace (Gaur et al., 2011). However, cross-border relationships can be complex and challenging especially for SMEs since they have limited resources to rely on expensive partnerships like larger firms (Dyer and Chu, 2010). Therefore, the extant literature suggests that trust is very important for SMEs in establishing successful cross-border business relationships (Gaur et al., 2011; Manolova et al., 2010). The current study adds to this discussion by suggesting that the impact of trust may depend on the extent to which distrust is present in export-import relationships (Vlaar et al., 2007). Distrust is consistently ignored in prior studies (Connelly et al., 2012). As a result, distrust has been conceptualized as a simple reversal of trust although it is associated (Walter, 2012). Distrust arises from a perception of incongruence between a focal organization’s values and those of its partner. Therefore, distrust portends general suspicion that a partner will behave opportunistically (Connelly et al., 2012). Recent studies have continued to suggest that little is known about the link between trust and distrust that may help to understand their impacts on exporter-importer relationships.

To draw on this background, the current study seeks to understand better the link between trust and distrust and how trust and distrust acts as governance mechanisms (Bachmann and Inkpen, 2011), as well as how these constructs can contribute to a more favourable or unfavourable business environment. In doing so, this study provides a proposed conceptual framework which illustrates the drivers and antecedents of trust and distrust for SME exporter-importer relationships. The study provides more theoretical understanding of the trust-based relationships in an export arena by using social network, transactional cost and trust-commitment theories. Finally, this study contributes to the research by providing a new path for future studies since the concept of trust, distrust and SMEs relationships in the context of transitional economies is relatively unexplored in the literature. Also, a number of managerial implications are suggested, such as understanding of trust and distrust in inter-organizational relationships is a critical managerial issue, because firms are increasingly looking for stable and quality relationships especially in international business, where relationship quality is expressed in terms of long-term orientation and lack of uncertainty.