Active or Passive? Examination of Dependency Behavior in Marketing Channels in China

ABSTRACT Purpose Inter-firm dependence is a fundamental construct in the literature of marketing channels. It substantially affects the relationships and behaviors between marketing channel partners. This study aims to examine the differences between active and passive inter-firm dependence regarding the antecedents and effects in the context of marketing channels in China. Methodology/Approach We designed a questionnaire and collected data from the manufacturers in manufacturer and dealer dyads. We obtained 202 valid data in the survey and analyzed the data with Bayesian structural equation modeling (BSEM). Findings First, in a manufacturer and dealer dyad, dealer’s important resources significantly induce active dependence from the manufacturer, and manufacturer’s active dependence, in turn, has a positive impact on manufacturer’s specific asset investments. Second, manufacturer’s specific asset investments positively affect manufacturer’s passive dependence, and this impact on manufacturer’s passive dependence is stronger than the impact of dealer’s important resources on manufacturer’s passive dependence. Third, the manufacturer’s active dependence plays a more important role in increasing dealer’s power than manufacturer’s passive dependence. Contribution Primarily, we clearly define active and passive dependence, and test whether differences exist between these two types of dependence regarding the antecedents and consequences. Besides, we develop a scale of active dependence which may be referred to in the future studies of inter-firm dependence. Implications Marketing managers should be aware of differences between active and passive inter-firm dependence when dealing with partners. They should also recognize that although both important resources and specific asset investments could change the structure of inter-firm dependence, their effects may be different.