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Abstract

This study focuses on trust formation and development in global buyer-supplier relationships. Trust affects all business relationships, especially global business-to-business (B2B) transactions due to the distances between buyers and suppliers. We use information signaling theory to examine how information indices and signals affect buyers’ trust in suppliers in global B2B commerce. Specifically, we examine how buyers’ trust is affected by (1) their perceptions of the national integrity and legal structure of suppliers’ country, and (2) third-party verifications of suppliers on B2B exchanges. Because buyer-supplier relationships usually evolve over time, we study how the effects of indices and signals change as the number of transactions between the partners increases. A survey of global organizational buyers finds that perceptions of national integrity, legal structure, and supplier verifications are all positively related to buyers’ trust. However, the number of prior transactions between buyers and suppliers moderates the impact of perceived legal structure on buyers’ trust.

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