Exploring the effect of relational governance on retailer-perceived performance

Relational governance is generally believed to lead to the development of long-term relationships and an increased emphasis on cooperation among channel participants. Although relational governance may not be an appropriate approach for all firms in all market situations, it might help firms build long-term relationships and gain sustainable competitive advantages. After a review of the relevant literature, we formulated six hypotheses. Data were collected from 286 usable questionnaires completed by retailers in the Taiwanese automobile industry. All hypotheses were verified with data from a sample of the respondents by using a structural equation model. Our results indicated that retailers’ trust and relationship satisfaction are positively related to their perceived performance. Relational governance is positively related to retailers’ trust and relationship satisfaction. Perceived market uncertainty and customer orientation are positively related to relational governance. Finally, this study concludes with a discussion on managerial implications and provides suggestions for future research.