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/approachThe authors collect the data from the side of 288 manufacturers.FindingsThis 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/valueThe 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.
Nankai Business Review International – Emerald Publishing
Published: Nov 23, 2020
Keywords: Network density; Network centrality; Channel conflict; Social network theory; Detailed contracts
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