The two sides of cooperation in export relationships: When more is not better

Studies have questioned the beneficial effects of exporter–importer cooperation by showing, without explaining, that it may not have a positive effect on performance. We contend that cooperation carries the genes of its own demise. We develop a model drawing insights from exchange theory and the dark-side perspective of social relationships, which we then test using two consecutive data collection efforts with exporters. Results suggest the influence of cooperation on exporter market performance has an inverted U shape; at high levels, the effect of cooperation on performance fades and becomes negative. Further, this effect is indirect. Cooperation must first influence the importer’s behavior, via its specific investments, to improve the exporter’s market performance. Moreover, we find that lower levels of interdependence increase the effect of low-to-moderate levels of cooperation on importer’s specific investments, and that the effect of cooperation on investments is impervious to psychic distance. Our results caution that more cooperation with foreign distributors is not always better and can hurt export performance. Indeed, export managers should not expect a simple, systematically positive, and direct relationship between cooperation and exporter market performance.