Conjoining International Marketing and

Relationship Marketing: Exploring

Consumers’ Cross-Border Service
Relationships

Research on international marketing constructs, such as consumer ABSTRACT

ethnocentrism and country-of-origin effects, typically focuses on con-
sumers’ initial evaluations of foreign products but ignores consumers’
emerging cross-border exchange relationships with foreign service Keywords: cross-border shopping,
providers. The influence of international marketing constructs on the foreign services, loyalty, consumer
development of these relationships also seems to be largely ignored. ethnocentrism, country of origin
The authors call for new research on cross-border service relation-
ships and integration of relationship marketing with international
marketing models. They introduce an exploratory test and develop a
research agenda that identifies several avenues for further research.
The empirical test involves a study of German consumers who regu-
larly cross the German–Dutch border to attend to their accounts with
a foreign (i.e., Dutch) bank. Loyalty to the foreign financial service
provider may be explained using substantive relational antecedents,
such as satisfaction, trust, and value, and international marketing
antecedents, such as consumer ethnocentrism and consumer beliefs
about the industry. The results show that the international variables
complement the relationship model. The authors discuss the manage-
rial and research implications and provide avenues for further
research.

The focus in most marketing literature on negative attitudes toward

foreign products is difficult to miss, even in a cursory review. Such Edwin J. Nijssen and
negative attitudes can arise from several sources (Nijssen and Dou-
glas 2004). For example, people may believe that products from
Hester van Herk
certain countries are of inferior quality (Balabanis and Diaman-
topoulos 2004; Han 1988; Verlegh 2007); hold hostile feelings
toward a country, its people, and products (Klein, Ettenson, and
Morris 1998); or believe that it is better to buy domestic and
morally wrong to buy foreign products (Klein 2002; Kwak, Jaju,
and Larsen 2006; Netemeyer, Durvasala, and Lichtenstein 1991;
Shimp and Sharma 1987). These influences are better known as
country-of-origin effects, animosity, and consumer ethnocentrism,
respectively. As they have mushroomed into a significant literature
stream, in general studies on these topics have assumed and found
that locals hold more positive attitudes toward, and thus prefer,
domestic rather than foreign alternatives.

Despite this multitude of studies, attention to the decreasing influ-

ence of negative attitudes toward foreign brands, perhaps due to
increased consumer awareness of foreign cultures, global markets, Journal of International Marketing
and commercial travel, remains extremely limited. Yet, fueled by © 2009, American Marketing Association
Vol. 17, No. 1, 2009, pp. 91–115
increased global media exposure, the Internet, and international ISSN 1069-031X (print)
travel, many consumers increasingly find foreign brands in their 1547-7215 (electronic)

91
 domestic markets and shop at airports and shopping centers
abroad. According to a recent article, cross-border shopping has
developed into a significant and worldwide phenomenon (The
Economist 2007), not only limited to luxury goods but also includ-
ing medicine, surgery services, financial services, and software
products. Merchandise and service quality, product lines, fun, and
financial benefits represent consumers’ main motivations for shop-
ping abroad (Herrmann and Beik 1968; Sullivan and Kang 1997).

Although most researchers still consider cross-border shopping an

occasional rather than structural behavior, emerging cross-border
service relationships represent a fundamental shift in consumer
behavior (Piron 2002), which warrants research attention. They
also require conjoining relationship and service marketing models
with international marketing models and considering new research
opportunities. Moreover, to help identify and understand the dif-
ferent stages in cross-border relationships, new constructs that cap-
ture the emerging positive attitudes toward foreign providers must
be developed and taken into account. As a result, new models that
include new combinations of constructs may emerge.

As LeVine and Campbell (1972) and Marshall and Boush (2001)

comment, information exchange and communication between
individual people of different cultures make them more informed
and reduce the levels of cognitive prejudice that may negatively
influence their attitudes toward foreign alternatives. Picking up
this thread, Nijssen and Douglas (2008) argue that consumers’ for-
eign experiences breed consumer social-mindedness and world-
mindedness, which increase their positive feelings toward foreign
brands. Thus, a remaining question centers on how traditional nega-
tive attitude variables found in international marketing research,
such as consumer ethnocentrism or country-of-origin effects, might
influence emerging cross-border service relationships. Rather than
just a new context, these developments represent a fundamental
change in the exchanges with foreign providers. Although inter-
national consumer behavior research suggests that consumers’
attitudes toward foreign products/services play a dominant role in
their initial evaluations of the foreign service and its provider,
researchers know little about the influence of these variables
when a cross-border exchange relationship develops.

The objective of this study is to introduce an exploratory test and

justification for researchers to develop a broader framework for
research on cross-border relationships and their dynamics. The
research model we present departs from previous work in two
important ways. First, unlike previous studies, we focus on actual
exchanges rather than purchase intentions, and we conjoin inter-
national consumer attitude literature with relationship marketing
research. Thus, we include simultaneously the effects of consumer
attitudes toward foreign brand variables (e.g., consumer ethnocen-
trism) and substantive relational variables (e.g., satisfaction, trust)
to explain consumers’ repurchasing behavior (i.e., loyalty) with a
particular foreign provider. We do not focus on the initial, one-off
evaluation of a hypothetical foreign brand/provider but rather on
the evaluation of a particular foreign provider located abroad with
which the consumer has an ongoing exchange relationship. Sec-

92 Edwin J. Nijssen and Hester van Herk

ond, unlike other studies of country-of-origin effects and con-
sumer ethnocentrism, we focus on services, in response to Malho-
tra and colleagues’ (2005) call for more attention to services in
international marketing research. In contrast with previous stud-
ies in this area (De Ruyter, Van Birgelen, and Wetzels 1998) that
consider attitudes or purchase intentions only, we adopt a rela-
tionship marketing approach to address the social aspects of serv-
ice delivery.

This article consists of four sections. First, we discuss the growth in

cross-border shopping and exchange relationships. Second, we
introduce our exploratory study, beginning with a description of a
relationship model that aims to capture ongoing service relation-
ships between individual consumers and their foreign providers.
We use this model as a baseline to develop hypotheses regarding the
influences of three traditional consumer attitudes toward foreign
providers: consumer ethnocentrism, beliefs about the foreign indus-
try, and perceived tax benefits. These constructs address different
levels of abstraction—namely, individual/group, industry, and tax
regime/national levels, respectively. Third, we discuss the research
design, data collection, and analytical approach and explore our
hypotheses using data from German consumers who are involved in
asset management with a Dutch bank located in the Netherlands,
own a Dutch bank account, and cross the German–Dutch border
regularly to attend to their financial affairs. Fourth, we discuss
some limitations and identify and outline several different avenues
for further research. Several managerial implications complement
this discussion.

Cross-border shopping has become a significant force and a

worldwide phenomenon that is expected to continue to grow BACKGROUND: GROWTH OF
(The Economist 2007). In particular, when benefits are high or CROSS-BORDER EXCHANGES
services are unavailable domestically, people do not hesitate to
shop abroad. For example, in Europe the introduction of a single
currency, harmonization of markets, and unrestricted travel for
European Union inhabitants have initiated soaring levels of cross-
border shopping (European Union 2007). Between 2003 and 2006,
the percentage of the European Union population that made at
least one cross-border purchase in the previous 12 months
increased from 12% to 26%. In North America, many consumers
cross the Mexican–U.S. and Canadian–U.S. borders daily with
shopping as their main objective (Guo, Vasquez-Parraga, and Wang
2006; Mogab et al. 2005). South Africa is a magnet for many con-
sumers from neighboring countries, just as consumers from Hong
Kong travel to Shenzhen, China, to shop. Other examples include
Singapore and Dubai, where consumers from all over the world
stop and shop (Fraser 2006). In addition to luxury and utilitarian
goods, medicine, surgery, and financial services are purchased
through such exchanges.

The increase in cross-border shopping also results from increased

consumer awareness of other cultures and their products/services
and the growth in international travel (Nijssen and Douglas 2008).
Less ethnocentric consumers often travel and make purchases
abroad; yet the expansion of cross-border shopping consists of
more than consumers simply making use of an opportunity to shop

Conjoining International Marketing and Relationship Marketing 93

 while they travel. In a study of Singaporean consumers shopping
in Malaysia, Piron (2002, p. 189) notes that many consumers, moti-
vated primarily by economic rationales, “cross the border each day
to buy goods; some even buy daily necessities.” Mogab and col-
leagues (2005) report similar findings for Mexicans who buy in the
United States and vice versa, suggesting that such international
shopping increasingly is a regular activity. Although not all con-
sumers travel extensively or live close to national borders, cross-
border shopping represents a significant shift that may hold impor-
tant information for marketers who want to understand emerging
cross-border exchange relationships.

Consumers who shop abroad regularly may develop exchange rela-

tionships with particular foreign providers (Cannon and Yaprak
2002; Nijssen and Douglas 2008). When a consumer returns regu-
larly to the same foreign retail area, he or she may develop an ongo-
ing relationship similar to the exchange relationships with local
providers in the home country. In this case, the cross-border con-
text may become less important, shifting to the background of the
exchange.

Although international consumer behavior research suggests that

consumers’ attitudes toward foreign products/services play domi-
nant roles in their initial evaluations of a foreign service and its
provider, their influence in a cross-border exchange relationship
remains unclear. Consumers engaging in cross-border purchases
tend to be less or moderately ethnocentric, but they still may
experience some nationalistic sentiments when they evaluate an
exchange relationship. Therefore, we posit that consumer attitudes
toward foreign providers have direct and moderating effects on
substantive relational constructs, such as satisfaction, trust, and
commitment (Garbarino and Johnson 1999; Morgan and Hunt
1994). Communication and personal interactions with the foreign
provider may increase consumers’ knowledge of the foreign cul-
ture, thus reducing, but not completely resolving, the negative
effects of consumer ethnocentrism. Cognitive consumer prejudice
may disappear, but some level of affective prejudice likely persists
(Tropp and Pettigrew 2005).

In the next section, we introduce an exploratory test to support fur-

ther research of cross-border exchange relationships that integrates
international marketing and relationship/service marketing con-
cepts. Before developing our hypotheses, we introduce a baseline
model of cross-border exchange to help investigate the influences
of international marketing variables in this setting.

To hypothesize and test our ideas of conjoining relationship mar-

EXPLORATORY STUDY keting and international marketing models for understanding
cross-border exchange relationships, we use an existing model
Customer–Foreign Provider from relationship marketing literature. The customer–foreign
provider model of cross-border exchange (see Figure 1) reflects a
Model of Cross-Border
consensus in relationship marketing literature that market
Exchange exchanges and customer loyalty depend on transactional, social,
and economic exchange mechanisms (Bolton, Smith, and Wagner
2003; Garbarino and Johnson 1999; Morgan and Hunt 1994). In this
model (Agustin and Singh 2005; Nijssen et al. 2003), “satisfaction”

94 Edwin J. Nijssen and Hester van Herk

 Figure 1.
Explaining Customer Loyalty
to a Foreign Service Provider

= Baseline model and effects

Located Across the Border:
Effects of International

= Moderation effects
Marketing Constructs on

Loyalty
Relational Marketing

= Direct effects
Antecedents

–
+
Consumer beliefs about foreign industry

Value
+

–
Tax benefits

Consumer ethnocentrism
+
–

Trust

–
+
+

–
Satisfaction

Conjoining International Marketing and Relationship Marketing 95

 refers to the transactional mechanism, “firm trust” to the social
mechanism, and “economic value” to the economic mechanism
of the cross-border exchange. We acknowledge the significant
debate and controversy about the links that connect satisfaction
and loyalty, among others. However, we emphasize that our goal
is not to address this debate but rather to introduce a baseline
model of consumer–provider exchanges and to explore the effects
of several international consumer attitude variables on ongoing
exchange relationships in a cross-border setting.

Customer loyalty entails an intention to perform a set of behaviors

that signal a motivation to maintain a relationship with the foreign
service provider abroad (Zeithaml, Berry, and Parasuraman 1996).
Satisfaction represents the customer’s evaluation of the degree to
which the most recent cross-border exchange with the foreign serv-
ice provider fulfilled some need, desire, or goal or led to some
other pleasurable end state (Oliver 1999). Firm trust refers to the
customer’s expectations that the foreign firm with which he or she
engages in the ongoing cross-border exchange can be relied on to
deliver on its claims and not act opportunistically in future
exchanges—that is, to keep its promise (Garbarino and Johnson
1999). Finally, economic value refers to a customer’s perception of
the benefits enjoyed relative to the costs incurred by maintaining
the foreign exchange relationship (Grisaffe and Kumar 1998; Sir-
deshmukh, Singh, and Sabol 2002).

Consistent with the notion of partial mediation, we posit that each

antecedent construct influences the downstream variables directly
as well as indirectly, following its effect on intervening constructs.
Because recent studies (e.g., Agustin and Singh 2005) have estab-
lished that these direct effects involve nonlinearities, such that
trust has a “motivator” effect (increasing exponentially) whereas
transaction satisfaction has a “hygiene” effect (decreasing expo-
nentially or leveling off), we conceptualize the direct effects of the
model to include these nonlinearities. Furthermore, in line with
accumulating evidence of direct pathways (Agustin and Singh
2005; Nijssen et al. 2003), we do not formally posit each hypothesis
inherent in the model. We continue to develop hypotheses to
examine the influence of several international consumer attitude
variables.

Drawing from the rich body of work on cross-border shopping and

Hypotheses international consumer behavior, we identify three relevant con-
structs: consumer perceived tax (financial) benefits (Bygvra 1998;
Nielsen 2002), consumer beliefs about the foreign industry or
country-of-origin effects of the product category or industry
(Nijssen et al. 2003), and consumer ethnocentric tendencies
(Shimp and Sharma 1987). Although we do not claim comprehen-
siveness, these variables are grounded in previous literature, and
we consider them useful and complementary for explaining con-
sumer attitudes toward cross-border exchange relationships.

Tax Benefits. Lower prices represent the main motivation for cross-
border shopping (Bygvra 1998; Di Matteo and Di Matteo 1996;
Wang 2004), and we anticipate two direct effects in the baseline
model. The first is the positive influence of a price advantage on

96 Edwin J. Nijssen and Hester van Herk

value, supported by utility theory, which suggests that consumers
try to optimize their exchange utility by demonstrating commit-
ment toward firms that serve their value extraction goals and thus
adjust their own behaviors to these expectations (Mayer, Davis, and
Schoorman 1995; Sirdeshmukh, Singh, and Sabol 2002). A price
difference for products or services among countries may exist for
practical reasons (e.g., presence of natural resources, cheap labor)
or as a result of different tax regimes (Nielsen 2002). To determine
the actual price advantage, consumers weigh a low price against
the extra cost and efforts involved in obtaining the product or serv-
ice. This assessment should include not only specific benefits (e.g.,
tax, pleasure) but also specific costs, such as travel to and from the
foreign provider.

Second, we anticipate a negative effect of tax benefits on trust.

Because tax benefits result only when tax authorities are unaware
of and do not penalize consumer behavior that avoids paying tax at
home (e.g., the consumer is not stopped by customs), the exchange
is surrounded by uncertainty. Moreover, the consumer’s abstinence
from the formal system defuses the official institutional protection
mechanisms in place and introduces an agency problem. Thus,
uncertainty may result from the risk that the foreign provider may
act opportunistically in these conditions. This risk should decrease
consumers’ evaluations of their trust in the foreign provider. Thus:

H1: Consumer-perceived tax benefits are related (a) negatively

to trust evaluations and (b) positively to economic value
judgments of a foreign service provider located abroad.

Beliefs About Foreign Industry. Consumers’ beliefs about a country

and industry from which they buy also affect their judgments of
foreign products and services (e.g., Balabanis and Diamantopoulos
2004; Nijssen and Douglas 2004). Although country-of-origin lit-
erature suggests that country cues are best specified at the general
country level, we posit that the country–industry level is more
appropriate for our context. In general, country-of-origin effects are
situational, such that consumers store information about providers
or products from specific markets rather than at the overall country
level (Samiee 1994)—for example, Italian pasta and shoes versus
Italian products in general. This conceptualization is consistent
with current schematic representations of consumer knowledge
and their empirical results; consumers interpret and encode their
interactions with providers in the context of the valence of the rele-
vant industry (Friestad and Wright 1995).

In the case of a cross-border exchange, the customer travels to make

the purchase and thus probably has a favorable attitude toward the
particular country–industry combination. Such a positive attitude
may spill over to the individual service providers in the industry
market (Fazio and Zanna 1978). Therefore, we anticipate a positive
direct effect of beliefs about a foreign industry on satisfaction,
trust, value, and loyalty toward the foreign provider.

Jones and Sasser (1995) posit that industry context also moderates
consumers’ satisfaction–loyalty relationship with providers. Draw-
ing on this study, Nijssen and colleagues (2003) use an attitudinal

Conjoining International Marketing and Relationship Marketing 97

 approach and conceptualize the effect of consumers’ disposition
toward the industry on ongoing exchange relationships. On the
basis of attribution theory, they hypothesize that a positive valence
toward an industry results in beneficial and benevolent attribu-
tions toward each of the industry’s member firms and enhances
links between individual customers and providers. Their empirical
results partially confirm the moderating effect of valence, such as
on the trust mechanism. Therefore, we anticipate positive modera-
tions of the interrelationships in the model. Thus:

H2: Consumer beliefs about the foreign industry are related

positively to evaluations of (a) satisfaction, (b) trust,
(c) value, and (d) loyalty toward a particular foreign serv-
ice provider located abroad.

H3: Consumer beliefs about the foreign industry have positive

moderating effects on the interrelationships among satis-
faction, trust, value, and loyalty toward a foreign service
provider located abroad.

Consumer Ethnocentrism. Shimp and Sharma (1987, p. 280) define

consumer ethnocentrism as “the beliefs held by … consumers
about the appropriateness, indeed morality, of purchasing foreign-
made products.” Because of its underlying in-group/out-group
mechanism, this construct is used in various studies of consumer
attitudes toward foreign products in many countries; in general,
the results confirm that higher consumer ethnocentrism scores
result in more negative evaluations of products and services (Klein
2002; Shankarmahesh 2006). Kwak, Jaju, and Larsen (2006) study
international Internet shopping with data from three different
countries and find a negative influence of ethnocentrism on foreign
evaluations of online advertisements. Focusing specifically on
cross-border shopping, Piron (2002) reports a modest but signifi-
cant, negative ethnocentrism influence on evaluations of foreign
products from consumers actively engaged in international cross-
border shopping. In turn, we anticipate a negative direct effect of
ethnocentrism on cross-border relationships.

Ethnocentric consumers also have negative feelings toward foreign

products, services, and providers, so when ethnocentrism levels
are high, consumers should develop uncertainty about the
providers’ future intentions. Consequently, they may be less inter-
ested in establishing relationships with the provider. Closely
related to prejudice, consumer ethnocentrism may moderate the
exchange mechanisms of cross-border exchange relationships
negatively. Affective prejudices toward the out-group often persist
(Tropp and Pettigrew 2005), despite positive and increasing experi-
ence with the provider. Moreover, consumers may experience a
lack of approval of their relationship with the foreign provider
from their in-group members. Consistent with these findings, we
expect that consumer ethnocentrism negatively moderates the
mechanisms of the foreign exchange relationship. Thus:

H4: Consumer ethnocentrism is related negatively to (a) satis-

faction, (b) trust, (c) value, and (d) loyalty toward a for-
eign service provider located abroad.

98 Edwin J. Nijssen and Hester van Herk

 H5: Consumer ethnocentrism has negative moderating effects
on the interrelationships among satisfaction, trust, value,
and loyalty toward a cross-border service provider located
abroad.

We tested our model in a cross-border shopping context using

German consumers who have a bank account for asset manage- METHOD
ment at a large Dutch bank with several branches located in the
Netherlands close to the Dutch–German border.1 From the bank’s Sample and Data Collection
database of approximately 800 German customers (who reside in
Germany), we randomly selected a subset of 368 ethnic German
customers living in Germany who arrange their bank affairs at the
Dutch branch. During the initial contact with these potential
respondents to request their participation in return for a small
token of appreciation (e.g., organizer/planner), we determined
that 21 people had terminated their relationship with the bank.
Furthermore, 159 people declined, mostly because of a “lack of
time” or “lack of interest.” A professional marketing research
company contacted the remaining customers by telephone and
interviewed them using a native German speaker and a computer-
ized questionnaire. Interviews typically lasted 15–20 minutes.
The respondents held primary household responsibility for deal-
ing with banking needs and asset management. After eliminating
some unreachable customers and those who provided incomplete
questionnaires, we were left with a net response of 160 cus-
tomers, a 46% response rate.

The English-language items used to measure the constructs were

translated and back translated to and from German, which resulted
in some modifications to ensure comprehension (Craig and Doug-
las 2000). We also pretested the questionnaire with five respon-
dents (whom we excluded from subsequent analyses); they sug-
gested only minor modifications.

In Table 1, we provide some sample characteristics. Approximately

two-thirds of the respondents are male, with an average age of 55
years. The majority had a mittlere Berufsausbildung (comparable to
a college degree), and approximately 45% had had recent contact
with the bank (within one month); the remainder had had at least
one contact within the past 12 months. The emphasis on older
male respondents is consistent with the fact that in most German
households, men are responsible for bank affairs and older con-
sumers have more savings and investments. Additional data show
that almost all respondents live within a 50-mile range of the bor-
der. Thus, consistent with results from previous international
cross-border shopping studies, our consumer sample consisted of
people who have a high income and live close to the border (Euro-
barometer 2004).

We provide an overview of the study scales in Appendix A. All our

measures employ items from multiple-item scales that have been Measures
tested and used in previous studies, with the exception of the con-
sumer perceived tax benefit construct, which we developed
specifically for this research. Because we used a telephone survey
method, we limited the length of the questionnaire, including the
number of items per construct.

Conjoining International Marketing and Relationship Marketing 99

100
Profiles
Respondents’ Demographic
Table 1.

Age (in Years) Percentage Gender Percentage Education Percentage Last Contact Percentage
25–35 7.5 Male 71.0 Primary school (Grundschule) 11.7 Within the past month 45.2
36–45 12.3 Female 29.0 High school ([mittlere] Reife Prüfung) 18.1 Several months ago 29.3
46–55 18.2 Some college (normale and mittlere Berufsausbildunng) 39.9 Half a year ago 17.6
56–65 36.9 College (höhere Berufsausbildung) 16.0 A year ago 4.8
65+ 25.1 Graduate school (Universität) 10.6 More than a year ago 3.2
Missing 3.7

Edwin J. Nijssen and Hester van Herk

The dependent variable, customer loyalty, employs three items we
gathered from the work of Zeithaml, Berry, and Parasuraman
(1996). Respondents indicated the likelihood that they would per-
form several future behaviors associated with the foreign provider,
including repeat purchase, doing most of their future banking with
this provider (i.e., share of category wallet), and engaging in posi-
tive word of mouth. We measured satisfaction with two items
based on respondents’ evaluations of their last experience (Nijssen
et al. 2003; Oliver 1999). Two items that refer to respondents’
expectations about the foreign provider’s reliability and delivery
on its promises measure firm trust (Morgan and Hunt 1994). The
economic value measure uses two items from Sirdeshmukh, Singh,
and Sabol’s (2002) scale, which focuses on the net benefits cus-
tomers obtain from maintaining ongoing exchanges with an insur-
ance provider.

To measure consumer ethnocentrism, we used five core items from

the shortened CETSCALE (Douglas and Nijssen 2003). The beliefs
about the foreign industry measure includes four items drawn from
extant country-of-origin literature (Balabanis, Mueller, and Mele-
war 2002) that refer to a foreign industry’s image, including its
level of innovation, reliability, and service quality/excellence.
Because these forces drive the construct, we model it as a formative
construct. Finally, we operationalize the perceived tax benefit con-
struct using two items that refer to banking abroad for tax reasons.

We used SmartPLS 2.0 (Ringle, Wende, and Will 2005), a partial

least squares (PLS) software application, to analyze the data in two
principal stages. First, we examined the descriptive statistics and
internal consistencies using composite reliability (Fornell and
Larker 1981). All reliabilities exceed Nunnally’s (1978) guideline of
greater than .70 (see Appendix A). The lowest score of .74 pertains
to the new construct, perceived tax benefits, and the highest of .88
applies to satisfaction. To research the discriminant validity of the
study constructs, we used Fornell and Larcker’s (1981) test, which
requires that a construct share more variance with its measures than
with other constructs in a given model. As we show in Appendix B,
none of the intercorrelations of the constructs exceed the square
root of the average variance extracted from that study construct.
Together, these results suggest that the measures are acceptable and
meet the criteria of convergent and discriminant validity.

Second, we used SmartPLS 2.0 to obtain PLS estimates for both the
structural and measurement parameters in our structural equation
model (Ringle, Wende, and Will 2005) because PLS is recom-
mended for relatively small sample sizes (Barclay, Higgins, and
Thompson 1995), has the advantage of allowing for the inclusion of
formative constructs, and has no restrictions on the distribution of
variables. We standardized the data before computing the quad-
ratic effects and moderation terms. Of the three original control
variables—age, education, and gender—we retained only age
because of its significant results and to keep the model parsimo-
nious. To test the effects and statistical significance of the hypothe-
sized pathways in the structural model and to obtain stable results,
we used SmartPLS’s bootstrapping option with 500 samples, as
Chin (1998) recommends.

Conjoining International Marketing and Relationship Marketing 101

 Table 2 shows the results of the structural model equation analysis
RESULTS using PLS. They suggest that the model explains nontrivial vari-
ance in the dependent constructs, including satisfaction (R2 = .22),
trust (R2 = .39), value (R2 = .38), and loyalty (R2 = .38). They also
imply that the hypothesized model provides a reasonable fit to the
data.

On closer inspection, the results of the relationships of the satisfac-

tion, trust, value, loyalty (STVL) model reveal that all effects pertain-
ing to the baseline model’s central route are positive and highly sig-
nificant. The central, direct effects are all substantial (β = .29, .29, and
.33, at p < .01, for satisfaction → trust, trust → value, and value →
loyalty, respectively). Together with the absent direct effect of satis-
faction on loyalty, this finding suggests that consumers in our sam-
ple engage in relational rather than transactional exchanges with the
provider (Garbarino and Johnson 1999). We find no significant
curvilinear effects, suggesting that linear relationships describe the
data adequately. We return to this point subsequently, after we detail
the influence of the international marketing constructs on the base-
line model variables and interrelationships.

Perceived tax benefits have positive and negative relationships to

value and trust, respectively, as we expected. However, both effects
are not significant. Although perceived tax benefits may be an
important reason for consumers to begin a cross-border banking rela-
tionship, they do not seem to play a significant role in evaluations
about continuing the relationship. This finding is consistent with
prior research that shows that, over time, the criteria for evaluating
an exchange relationship may evolve (Dwyer, Schurr, and Oh 1987).
Thus, we find support for neither H1a nor H1b.

Consumer beliefs about the Dutch banking industry have a positive

influence on all constructs of the baseline relationship marketing
model, as we anticipated. In particular, the direct effects of beliefs
on satisfaction and trust are strong (β = .41 and β = .33, p < .01). The
direct effects on value and loyalty are more modest (β = .12, p < .05;
β = .14, p < .01), though the total effects are greater because of the
indirect influences through satisfaction and trust. Finally, we find a
positive moderating influence of beliefs about the Dutch banking
industry on the satisfaction–trust relationship (β = .21, p < .01).
Together, these results support H2a–d and partially support the mod-
erating hypothesis, H3.

Our examination of the other parameters shows the broad negative

influence of consumer ethnocentrism on all constructs of the STVL
model. However, whereas the direct effects on satisfaction and
value are significant (β = –.12, p < .05; β = –.13, p < .01), the effects
on trust and loyalty are not. Moreover, none of the moderating
influences of consumer ethnocentrism on the interrelationships of
the STVL model are significant. Thus, the findings support H4a and
H4c but do not support H4b and H4d, nor do they support the mod-
erating hypothesis, H5. These findings provide support for our
expectations that the negative influence of ethnocentrism persists
but is more limited in scope for consumers with ongoing exchange
relationships with a foreign provider than for consumers involved
in the initial evaluation of a cross-border exchange.

102 Edwin J. Nijssen and Hester van Herk

 Dependent Constructs
Loyalty Value Trust Satisfaction
Independent Constructs β (SE) t-Value β (SE) t-Value β (SE) t-Value β (SE) t-Value
Value .33 (.08) 3.9** — — — — — — — — —
Value2 .11 (.08) 1.4 — — — — — — — — —
Trust –.01 (.10) .1 .29 (.07) 4.2** — — — — — —
Trust2 .09 (.10) .9 –.04 (.08) .4 — — — — — —
Satisfaction .10 (.09) 1.0 .05 (.09) .6 .29 (.08) 3.8** — — —
Satisfaction2 .18 (.11) 1.6 –.10 (.09) 1.1 .13 (.11) 1.1 — — —
Consumer ethnocentrism –.10 (.07) 1.5 –.13 (.06) 2.1** –.03 (.10) .3 –.12 (.07) 1.7*
Consumer beliefs about foreign industry .14 (.07) 2.0** .12 (.07) 1.7* .33 (.07) 4.8** .41 (.06) 6.9**
Consumer perceived tax benefit — — — .14 (.09) 1.6 –.03 (.06) .4 — — —
Interactions
Satisfaction × consumer ethnocentrism .05 (.12) .4 .12 (.11) 1.1 .10 (.10) 1.0 — — —
Trust × consumer ethnocentrism .04 (.11) .4 .03 (.11) .3 — — — — — —
Value × consumer ethnocentrism .08 (.13) .6 — — — — — — — — —
Satisfaction × beliefs about foreign industry .17 (.11) 1.5 –.12 (.10) 1.2 .21 (.08) 2.7** — — —
Trust × beliefs about foreign industry .02 (.10) .2 –.09 (.11) .8 — — — — — —
Value × beliefs about foreign industry –.18 (.13) 1.5 — — — — — — — — —
Control
Age –.07 (.07) 1.0 –.09 (.06) 1.5 –.13 (.05) 2.4** –.20 (.06) 3.1**
R2 .38 .38 .39 .22
*p < .05.
**p < .01.

Conjoining International Marketing and Relationship Marketing

Table 2.

International Marketing

Trust, Value, and Loyalty

Constructs on Satisfaction,
PLS Results of the Estimated
Coefficients for the Impact of

103
 Our findings show that in cross-border settings, relationships
DISCUSSION develop between consumers and foreign service providers. The
absence of a significant direct relationship between satisfaction
Theoretical Implications of the and loyalty and the presence of the highly significant central path-
way of the model confirm that consumers develop relational,
Empirical Test
rather than transactional, connections with foreign service
providers located on the other side of their national border. A sig-
nificant finding, the positive borderline quadratic effect of satisfac-
tion on loyalty, suggests that Agustin and Singh’s (2005) designa-
tion of satisfaction as a hygiene factor cannot be replicated here
and evinces a small transactional sentiment in the exchange rela-
tionship. The cross-border situation apparently introduces uncer-
tainty, which prompts consumers to pay attention to transactional
satisfaction and may make them more fickle.

As anticipated, international marketing variables also play a role

and complement the model. Two of the three international con-
sumer marketing constructs influence one or more constructs of
the STVL model. Thus, along with relationship marketing
antecedents, international marketing constructs are important for
understanding consumer behavior in cross-border settings.
Although the influence of these variables may decrease when con-
sumers gain more exposure to other cultures and more experience
shopping abroad, it persists in consumers’ ongoing cross-border
service relationships with foreign providers.

In line with previous findings about the importance of financial bene-

fits as a key motivation for international “outshopping” (Bygvra 1998;
Wang 2004), we find a positive but nonsignificant (p < .1) influence
of perceived tax benefits on the perceived value of the exchange rela-
tionship. This nonsignificant but borderline effect implies that finan-
cial benefits may be the initial motivation for engaging in the
exchange relationship, but their role may decrease when the
exchange relationship develops. The lack of a negative influence on
trust is more difficult to explain; a possible reason involves the
increased uncertainty and distrust created if customers circumvent
tax payments in their home country, though these beliefs do not
necessarily trigger a fear of opportunistic behavior by the bank.

Consumer ethnocentrism has several direct effects. The direct effects

on satisfaction and value are consistent with results from prior
research that indicate negative effects of consumer ethnocentrism on
foreign product and service evaluations (e.g., De Ruyter, Van Birge-
len, and Wetzels 1998; Kwak, Jaju, and Larsen 2006). No moderating
influence of ethnocentrism on the different interrelationships or
mechanisms of the baseline model exists. Together with the limited
size of the direct effects on satisfaction and value, this absence of
moderation may be characteristic of the more limited role of con-
sumer ethnocentrism in ongoing exchange relationships with for-
eign providers. This finding complements work on cognitive and
affective prejudice (Tropp and Pettigrew 2005) that indicates that
negative feelings between people from different cultural groups
decline but do not disappear after contact with each other.

Positive beliefs about the foreign industry bolster consumers’ satis-

faction, trust, value, and loyalty. The relationship between satisfac-

104 Edwin J. Nijssen and Hester van Herk

tion and trust is also enhanced by these beliefs; the more positive
people are about the foreign industry, the more their satisfaction
affects their trust in the foreign service provider. More important,
positive beliefs about the foreign industry outweigh (or neutralize)
the negative effect of consumer ethnocentrism on satisfaction and
value. The latter result points to an interesting phenomenon: Inter-
national consumer attitudes can be negative (e.g., consumer ethno-
centrism) and/or positive (e.g., a favorable product–country combi-
nation). Such contradictory feelings toward a foreign service
provider may lead to ambivalent attitudes. Because people tend to
avoid ambivalent feelings, they may refrain from purchasing prod-
ucts that generate these conflicting emotions (Lau-Gesk 2005). Our
results in a cross-border setting suggest that, in particular, ambiva-
lent feelings (caused by positive beliefs about the foreign industry
but negative consumer ethnocentrism) influence the value and loy-
alty constructs, which have a dominant effect on the decision to
quit or continue the relationship with a foreign service provider.

In our study, we focused on German customers of a Dutch bank

(foreign service provider) located on the Dutch side of the
Dutch–German border. Therefore, the image that Germans hold
about the Dutch and Dutch companies might help clarify our
results. Pasquier and Fasnacht (2003) show that German con-
sumers evaluate the Dutch in general and Dutch companies in par-
ticular positively; specifically, they believe that Dutch companies
provide good opportunities for investment, are reliable and trust-
worthy, and attempt to collaborate with foreign providers. How-
ever, German cross-border banking is not limited to the Nether-
lands; Germans also travel to neighboring countries such as
Switzerland, which also enjoys a positive image in Germany. How-
ever, this positive image does not extend to all Germany’s neigh-
bors; for example, companies from the Czech Republic are consid-
ered far less reliable and trustworthy. These different images might
result from cultural and wealth distance; the cultural distance
between Germany and Switzerland is the smallest, followed by the
Czech Republic and the Netherlands, whereas the distance in
wealth (gross domestic product per capita) is smallest for the
Netherlands, followed by Switzerland (more wealthy than Ger-
many) and the Czech Republic (less wealthy than Germany). Confi-
dence in the institutional arrangements of the different countries,
or lack thereof, probably also plays an important role. This addi-
tional information helps explain the strong positive effects we find
for attitude toward the foreign industry construct.

After we finished our study, new regulations implemented by the

European Committee required all member states’ financial service
firms and banks to report European Union inhabitants’ foreign
assets and interest gains to the consumers’ domestic tax authori-
ties. These regulations removed the tax benefit of the relationship
with a provider across a border. We contacted the bank that was the
subject of our empirical study to investigate the effect of this meas-
ure on its German customer portfolio. From the additional infor-
mation the bank provided and follow-up interviews to assist our
interpretation, we determined that approximately 45% of the
bank’s German customers had discontinued their business, which
means 55% continued their accounts. This finding confirms the

Conjoining International Marketing and Relationship Marketing 105

 existence of a relational exchange, with benefits beyond the tax
advantage. So, even if financial considerations were the initial
motivation for banking abroad, relational considerations eventu-
ally became more important and began to drive the relationship.

We should mention several limitations of our exploratory test.

Limitations First, although we adopted our measures from validated scales and
they proved reliable, they also contain a limited number of items
per construct. Second, our study is cross-sectional. A longitudinal
design could help provide a better understanding of the evolution
of cross-border relationships and how the role of international mar-
keting variables changes over time. It also would resolve the issue
of common method bias and help clarify how motivations to
engage in a cross-border relationship may move to the background
and be replaced by other, new motivations. Such research could
lead to a dynamic rather than static view of negative attitudes
toward foreign products and providers.

Third, we used a convenience sample from a single industry and

German consumers in a German–Dutch cross-border context,
which limits the generalizability of the results. Generalizability
across cultures might be increased by including more countries
and using cultural distance (Sivakumar and Nakata 2001) or dis-
tance in wealth as variables. In our case (Germany–Netherlands),
the cultural distance and the distance in wealth are limited, but
with greater distance, stronger effects may derive from the inter-
national marketing variables on the baseline model’s constructs
and interrelationships. Further research could try to replicate our
findings using larger, random samples involving other or more
industries and preferably countries for which a different image is
expected. When using large samples, other variables affecting the
relationship might include product quality, availability, and enjoy-
ment. We explicitly mention sample size because we found several
nonsignificant effects, which may prove significant for a larger
sample. The bootstrapping procedure in PLS helps reduce sample-
size issues but cannot eliminate them.

Fourth, we found that the connection between the consumer and

the foreign provider is relational, but a transactional element also
seems to be present. Specifically, we do not find an expected
hygiene effect of satisfaction on loyalty. The cross-border situa-
tion may have caused this effect, but the relationship with a per-
son from another culture or uncertainty about the relationship
also might be a cause. A study explicitly investigating the trans-
actional sentiment in the satisfaction–trust relationship in other
cross-border or consumer–foreign provider situations may pro-
vide important insights into the issue.

From a research standpoint, this investigation suggests five impor-

Avenues for Further Research
tant avenues for further research. First, our results demand a more
detailed study of the dynamics of cross-border exchange relation-
ships. The work should focus on identifying different stages in the
relationship in general and the decreasing influence of negative
international marketing variables in particular. To capture the
dynamics involved, a longitudinal study is necessary, though addi-
tional cross-sectional work would also be helpful for multiple cus-

106 Edwin J. Nijssen and Hester van Herk

tomer groups. Along this research avenue, studies of how con-
sumers deal with simultaneous positive and negative emotions also
could be important (Otnes, Lowry, and Shrum 1997). Ambivalence
theory might provide a basis for investigating the combined positive
and negative reactions of consumers involved in cross-border
exchanges. Although direct measures consider the extent of ambiva-
lence experienced, indirect measures also might use separate indica-
tors for opposing emotions (Priester and Petty 2001). By including
ambivalence in studies of cross-border exchange relationships, mar-
keters could discern how consumers’ emotions evolve and could
adjust marketing efforts accordingly. Favorable interpersonal con-
tacts appear to reduce intraindividual feelings of ambivalence, so
providers might be able to influence these feelings.

Second, new constructs should help capture the positive attitudes

that consumers may develop over time and that may affect the
cross-border exchange relationship, including, for example, cos-
mopolitanism, openness to other cultures, and world-mindedness.
Nijssen and Douglas (2008) show that consumer world-mindedness
leads to the adoption of more products from other cultures, and
Hannerz’s (1990) essay on cosmopolitanism suggests that as people
become more familiar with a foreign culture, they develop a desire
for products and services that are authentic representations of that
culture. Exploring new positive international marketing variables
will be useful not only in cross-border settings but also in other
situations that involve increased contact between consumers and
foreign providers.

Third, relationship and service marketing researchers should

extend their work by modeling contextual effects. Johnson and
Selnes (2004) mention that, in general, contextual influence is lack-
ing from relationship research, but both our study and Grayson,
Johnson, and Chen (2008) argue for an approach that includes the
broader context in which relationships develop. In an international
setting, industry, economic, and cultural factors are critical. In addi-
tion to drawing on country-of-origin theory, researchers might adapt
institutional theory to model consumers’ perceptions of the institu-
tional field of the marketplace of countries, explain differences in
the intensity of exchange relations, and increase understanding of
why consumers prefer transactional rather than relational exchanges
in certain markets or cross-border situations.

Fourth, our sample contains mainly people with low levels of con-
sumer ethnocentrism, which has a residual influence on their
evaluations of satisfaction and value, for example. Further research
should explore these results and might benefit from studying the
dynamics of the exchange relationship of people with both low and
high levels of ethnocentrism. These groups may have different
motivations for engaging with a foreign provider and travel differ-
ent trajectories. For example, research could determine whether
more ethnocentric people focus on the transactional elements of
the relationship, whereas less ethnocentric people consider the
social elements.

Fifth, our exploratory study centers on the Dutch banking industry,

which enjoys a positive image in Germany. Research suggests that

Conjoining International Marketing and Relationship Marketing 107

 the effect of negative attitudes toward people with another cul-
tural background on willingness to buy is moderated positively by
a more favorable product–country image (Ouellet 2007). Addi-
tional relationship marketing research could build on these find-
ings by focusing on the extent to which a less or more positive
product–country image in the service industry contributes to the
development of ongoing relationships with foreign providers, as
well as the effects of more neutral or even negatively perceived
product categories. This research also might involve developing
strategies that firms can use to tackle these image problems when
part of their global strategy is to increase their service relationships
abroad.

These five alternatives offer new opportunities and may give new
impetus to this area of international marketing research to address
the changes that are taking place in the world. Although this
research is limited to cross-border exchange relationships, it could
be expanded easily to relationships with foreign (service) providers
in consumers’ home market, as well as to brands with global rather
than foreign positioning.

Consumer cross-border shopping is increasing around the globe

Managerial Implications and at double-digit rates in many countries. It is not limited to spe-
cific products but includes a broad range of products and services.
Consumers can order products from another country using a cata-
log or the Internet, but many people also like to travel and shop
across the border. These developments represent important new
opportunities for internationally oriented retailers. Although most
consumers may be driven primarily by low prices, there seems to
be a trend toward shopping abroad for enjoyment and even utili-
tarian reasons. According to our results, consumers do not just
shop abroad occasionally but actually build and deepen exchange
relationships with foreign providers across the border.

Thus, our findings suggest that many customers with another cul-
tural background are willing to begin a relationship with a foreign
service provider. After a relationship has formed, it becomes
important for the provider to develop it by investing in relation-
ship quality. Our findings also show that feelings of trust and value
are especially important in this relationship. Effective communica-
tion can help improve contact in the relationship and reduce mis-
perceptions of customers from other cultures (Griffith 2002). Cus-
tomers with strong provider relationships will be less inclined to
leave and less prone to competitors’ promotions. Providers that
build cross-border customer relationships and engage in moving
customers up the customer pyramid (Zeithaml, Rust, and Lemon
2001) also will find it easier to remain attractive to at least part of
their foreign customer base, even after some financial benefits
evaporate. In the case of the bank used in our study, more than half
the German customers stayed even after the tax benefits were gone.
A similar effect might be expected in other cross-border settings in
which the cultural distance is similar or even less (e.g., United
States–Canada, Hong Kong–Shenzhen, China).

Managers of companies that depend on cross-border shoppers also

could focus on obtaining and keeping a positive image of their

108 Edwin J. Nijssen and Hester van Herk

industry when it is strong and congruent with the product cate-
gory. A favorable industry–country image leads to positive evalua-
tions of a product or service (e.g., Balabanis and Diamantopoulos
2004). Our results add to these findings. We demonstrate that a
favorable image of the foreign industry affects consumers’ satisfac-
tion with the service provider in a positive way and, to a lesser
extent, feelings of trust and value. Thus, positive beliefs about the
industry–country image seem to help retain consumers in a cross-
border service setting.

Finally, managers should support researchers in their efforts to

explore the phenomenon of cross-border shopping. For example,
managers could specify research topics related to the phenomenon.
Their personal and financial involvement will help international
marketing researchers move forward, making inroads into the
directions outlined previously.

1. To evaluate the level of cultural distance, we compare the

Netherlands and Germany, using a cultural distance measure NOTE
based on Hofstede (Sivakumar and Nakata 2001), with other
cross-border outshopping settings reported in the literature. The
cultural distances between Hong Kong and China, the United
States and Canada, the United States and Mexico, and the
Netherlands and Germany are 27, 22, 151, and 80, respectively,
which suggests a median level of cultural difference between the
two cultures involved in our empirical study.

Consumer Ethnocentrism (five-point Likert scale, “strongly dis-

agree”–“strongly agree”) APPENDIX A: MEASURES
• Only those products that are unavailable in Germany should be
imported.

• A real German should always buy German-made products.

• We should purchase products manufactured in Germany instead

of letting other countries get rich off us.

• Germans should not buy foreign products, because this hurts

German business and causes unemployment.

• It may cost me in the long run but I prefer to support German

products.

Consumer Beliefs About the Foreign Industry (five-point Likert

scale, “strongly disagree”–“strongly agree”)

• Dutch banks are very innovative.

• Dutch banks are very reliable.

• Dutch banking services are well developed and of high quality.

• Dutch banks deliver excellent banking services, quality–price

ratio wise.

Conjoining International Marketing and Relationship Marketing 109

 Consumer Perceived Tax Benefit (five-point Likert scale, “strongly
disagree”–“strongly agree”)

• From a tax perspective, it is beneficial to have a Dutch bank

account.

• Given the tax advantages I do not mind travelling further, i.e., to

The Netherlands and back.

Satisfaction (five-point semantic differential scale)

• How do you feel about your last transaction with this bank?
(“very dissatisfied”–“very satisfied”)

• How do you evaluate your last personal interaction with this

bank? (“very unpleasant”–“very pleasant”)

Trust (five-point semantic differential scale)

• How do you evaluate the bank’s reliability? (“very unrelia-

ble”–“very reliable”)

• To what extent does the bank keep its promises? (“very

poorly”–“very well”)

Value (five-point semantic differential scale)

Comparing the benefits you receive from your relationship with

this bank (e.g., interest rate, service) and the cost and effort
incurred, how would you evaluate this relationship?

• (“very unattractive”–“very attractive”)

• (“very disadvantageous”–“very advantageous”)

Loyalty (five-point Likert scale, “very unlikely”–“very likely”)

• How likely is it that you will continue to use this bank’s services/
products in the future?

• How likely are you to use this bank for other/future banking
needs?

• How likely are you to recommend this bank to friends and

relatives?

110 Edwin J. Nijssen and Hester van Herk

 Construct M (SD) CR 1 2 3 4 5 6 7
1. Consumer ethnocentrism 1.72 (.51) .77 .64
2. Consumer beliefs about foreign industry 3.62 (.45) N.A. –.05 N.A.
3. Consumer perceived tax benefits 3.51 (.73) .74 .17* .28** .77
4. Satisfaction 4.15 (.58) .88 –.17* .40** .09 .88
5. Trust 4.11 (.48) .85 –.12 .47** .10 .47** .86
6. Value 3.79 (.63) .82 –.19* .37** .17* .41** .47** .84
7. Loyalty 3.42 (.72) .77 –.20* .40** .16* .34** .37** .41** .73
*p < .05.
**p < .01 (two-tailed).
Notes: Square root of average variance extracted is on the diagonal. CR = composite reliabilities. N.A. = not applicable.

Conjoining International Marketing and Relationship Marketing

Reliabilities
Appendix B.
Correlation Matrix of
Constructs and Their

111
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