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Why the proposal of a complex contract may harm or foster a partner's trust

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  • Praxmarer-Carus, Sandra

Abstract

Extant literature suggests, but has not tested, explanations as to why the proposal of a complex contract, compared to a simple contract, may harm or foster a new business partner's trust. This paper uses qualitative interviews to confirm four explanations that the literature suggests and to identify an additional explanation that the literature has not considered. Then, the paper presents an experiment with scenarios in three countries to determine whether the explanations (mediators) prove relevant. Each of the explanations proved relevant in at least one of the countries. The findings demonstrate that (1) the mediators this paper tests are useful in explaining the effects of contract complexity on a partner's trust, and they suggest that (2) culture moderates how individuals interpret complex contracts and build trust. For future research, the mediation model this paper proposes provides a basis for detailed tests of relevant moderators.

Suggested Citation

  • Praxmarer-Carus, Sandra, 2014. "Why the proposal of a complex contract may harm or foster a partner's trust," Journal of Business Research, Elsevier, vol. 67(7), pages 1421-1429.
    • Handle: RePEc:eee:jbrese:v:67:y:2014:i:7:p:1421-1429
    DOI: 10.1016/j.jbusres.2013.07.025
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    References listed on IDEAS

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    5. van der Valk, Wendy & Lumineau, Fabrice & Wang, Wenqian, 2019. "Research on contracting in supply chain management and related disciplines: A synthesis of scholarly recommendations and a discussion of future opportunities," Other publications TiSEM 55901a88-7fc5-4808-a47a-e, Tilburg University, School of Economics and Management.

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