The influence of the institutional context on interfirm relationships: A comparative study between low-and high-income countries

Abstract

Today's competitive environment has pushed companies to developed collaborative relationships with other firms on the market to improve their performance and achieve a competitive advantage. Among the existing collaborative strategies, horizontal collaboration has gained much attention recently. However, besides the potential improvement this strategy can bring, very few successful long-term cases are reported in the literature. In this paper, we investigate the role that country context plays in determining the collaboration success, specifically the strength of the institutional context. A model linking collaboration activities to its outcomes is tested in two independent samples representing upper-middle-high-income (UMHI) and lower-middle-low-income countries (LMLI). The results show that firms in UMHI countries are more likely to commit to the relationship once trust is established, whereas firms in LMLI countries are more likely to be satisfied with the relationship as a result of developed trust.