The authors examine the effects of both transnationality (cross-border versus domestic exchange) and national culture (U.S. versus German buyers) on the use of three primary modes of governance: (1) the market mechanism, (2) trust, and (3) formal contracts. Drawing on theory, the authors develop a series of hypotheses. Then, they test the model on a sample of more than 500 buyer–supplier relationships. The results show that transnationality and culture both affect the choice of governance modes.
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