Despite recent progress in research on marketing channel relationships, one important question remains unaddressed: Do distributor relational behaviors lower transaction cost for distributors? If so, how do relational behaviors affect transaction cost? This study examines the process through which relational behaviors affect transaction cost. Combining the relational perspective with the transaction cost analysis of exchange, the author develops hypotheses on the links between relational behaviors and transaction cost from a distributor's point of view: a distributor's relational behaviors have different direct and indirect effects on its transaction cost. The proposed hypotheses are tested on distributor–supplier relationships with data collected through a national survey of industrial distributors. The hypotheses on the dual, differential effects of relational behaviors on distributor transaction cost received partial empirical support.
What drives a distributor's superior exchange performance with
its supplier? Various elements of performance metrics, including
qualitative measures such as satisfaction (Geyskens et al., 1999)
and commitment (Gruen et al., 2000) and quantitative measures
such as transaction cost (Buvik and John, 2000), sales, and profit
(Bello and Gilliland, 1997), have been examined. Market researchers
also have identified firm-specific, dyadic, and extradyadic
drivers of exchange performance (for studies on those
drivers, see Bello andGilliland, 1997; Cannon and Perreault, 1999).
Among the drivers of superior exchange performance,
academic researchers (Jap, 1999) and practitioners (Fites, 1996)
concur that engaging in relational behaviors is essential for
garnering better exchange performance. Relational behaviors
refer to activities that are specifically targeted to benefit a particular
exchange relationship. Dyer and Singh (1998) maintain
that relational rent as a supernormal profit from an interfirm
exchange can only be earned and preserved through relational
behaviors such as investing in relationship-specific assets and
engaging in substantial knowledge exchange between two
exchange parties (see also Jap, 1999).
Generating economic rent is certainly desirable to exchange
parties, and the benefits of relational behaviors are well
established. However, can the benefits of relational behaviors
be reaped without incurring cost? Consider the issue of investing
in relationship-specific assets. Although recent studies recognize
that relation-specific assets help firms reduce cost and achieve
product differentiations (Rindfleisch and Heide, 1997; Stump and
Heide, 1996), many previous studies, using transaction cost
analysis logic, have highlighted vulnerability to exploitation by
the exchange partner (cf. Bensaou and Anderson, 1999). Therefore,
relational behaviors, including investment in relationshipspecific
assets, appear to engender both cost and benefits to a
party that engages in such behaviors. Yet extant literature has not
been clear about the dual effects of relational behaviors and their
net value for exchange performance (Rokkan et al., 2003).
Instead, either the costly aspects (Heide and John, 1988) or the
