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

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.

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