Export relational governance and control mechanisms : Substitutable and complementary effects

Purpose – The purpose of this paper is to examine the direct and interaction effects of relational governance and two control mechanisms, output control and process control in the context of international exchange relationships. Cross-border exchange relationships receive growing attention in the literature. Yet extant research has mainly examined single governance mechanisms. Among the few studies that investigate the interaction effects of relational governance and control mechanisms, some believe that the two mechanisms have conflicting effects, whereas others argue that they are complementary in nature. Design/methodology/approach – Based on a sample of 184 Chinese export ventures, the empirical paper adopts the hierarchical moderated multiple regression approach. Findings – The authors find that relational governance contributes positively to export performance, while output control leads negatively to export performance. The findings further suggest that output control complements relational governance to enhance export performance when combined. However, process control and relational governance substitute each other and reduce effectiveness when used simultaneously. Research limitations/implications – The study sheds new light on the ongoing debate about whether control mechanisms substitute or complement relational governance. Originality/value – The study is novel in addressing the issue of how relational governance interacts differently with two control mechanisms in the international exchange relationships.