Culture Proximity and Non-Local Major Customer Relationships:Formation and Mechanisms
The"Pattern of Diversity in Unity of the Chinese Nation"generates implicit barriers to cross-regional supply chain relationships.The cultural proximity would promote major customer relationships between companies in different regions.Dialect distance measures the cultural similarity between the two places,and the smaller the dialect distance,the higher the sales proportion of listed firms to major customers in that region.The mechanism lies in the fact that cultural proximity contributes to improving the exchange of information,promoting trust and recognition,and providing more inherent social capital.Further,there's a stronger effect of cultural proximity for non-state-controlled and smaller companies,as well as for non-state-controlled customers.The effect of cultural proximity relies on sound formal institutions;effect is more pronounced in areas with a better contractual environment and a higher degree of marketization.Finally,there is a positive effect of cultural proximity on the stability of major customer relationships.
customer relationshipculture proximitydialect distancesupply chainownership type of customercustomer relationship stability