Relational governance and opportunism in logistics outsourcing relationships: empirical evidence from China

Abstract Logistics outsourcing is prevalent in today's business world as a strategy to obtain competitive advantages. As in other relational exchanges, it is imperative to understand how to alleviate opportunistic behaviour in logistics outsourcing relationships. Using China's burgeoning logistics industry as a backdrop, and drawing on social exchange and transaction cost theories, this study examines how relational norms and trust mitigate opportunistic behaviour and how environmental uncertainty moderates the effects of norms and trust from logistics users' perspective. Employing data collected from 119 manufacturing and service firms in China, we empirically test the proposed model and find that trust and norms are effective safeguards in reducing the opportunistic behaviour of logistics service providers, particularly in highly uncertain environments. Keywords: logistics outsourcingrelational normstrustuncertaintyopportunismChina Acknowledgements This research was supported by grants awarded to the first author by the Southwestern University of Finance and Economics (China) and the University of Southern Mississippi (USA) and to the second author by the National Science Foundation of China (Grant no. 70872117). The authors are also grateful for the support they received from the Centre for Supply Chain Management & Logistics and the Li & Fung Institute of Supply Chain Management & Logistics at the Chinese University of Hong Kong. The basic work on this article was completed while the first author was a summer visiting scholar at the Southwestern University of Finance and Economics (China).