Effects of national culture on trust development : a study of Canadian and Japanese business students

Trust represents an important issue in the study of business alliances, especially cross-border alliances. Difficulties in monitoring, differences in national legal systems, and geographic limits on jurisdiction often require significant ex-ante trust in potential international joint venture (IJV) partners. The attributes of each partner's cultural context as well as the cultural differences between partners may facilitate or impede the formation of trust in IJVs. However, little work has examined the role of culture in the nature and development of trust across borders. Comparing samples of Canadian and Japanese business students, this study investigates whether national culture matters in assessing trustworthiness and determining appropriate levels of behavioral trust. The study follows a fractional factorial design, using 48 different vignettes to manipulate eight different contextual factors (trustee characteristics and IJV contingencies). The results suggest that at least two dimensions of culture, individualism/collectivism and umversalism/particularism, do matter in trust development. Initial analyses indicate that while formal mechanisms (e.g., contracts) play an important role in Canada, where they increase the perceived predictability, integrity and trust in potential partners, neither formal nor informal mechanisms (e.g., the number of relationship linkages between the trustor and trustee) change the assessments of trustworthiness or the levels of trust in Japan. Follow-up analyses, however, indicate that the specific type of relationships is important for assessing trustworthiness in Japan. Furthermore, integrity and benevolence play distinctly different roles: Canadian trustors place most emphasis on integrity whereas Japanese trustors place most emphasis on benevolence. Moreover, integrity has a greater impact on perceptions of intent to be trustworthy in Canada than Japan, and benevolence has a greater impact on perceptions of intent to be trustworthy in Japan than in Canada. These findings suggest that cognitive trust-building mechanisms are more prominent in Canada while affective mechanisms are more prominent in Japan.Business, Sauder School ofGraduat