| Bank-small firm relationships have been primarily studied by finance scholars who generally conceptualize lender-borrower relationships using a principal-agent perspective. As a theoretical framework, agency theory does little to explore the social-psychological factors within economic exchange (Donaldson, 1990), resulting in calls for alternative models which reflect the richness of bank-corporate relationships (Holland, 1994). In response to this call, this study employs Lewicki and Bunker's (1996) trust typology, and explores bank-level factors that influence a customer's trust in their bank, and how this trust is associated with other customer outcomes (i.e., satisfaction with service, satisfaction with financial factors, and a customer's likelihood to shop for an alternative bank).; More specifically, the study identifies a bank's extra efforts such as helpfulness, information sharing, and flexibility as a relational strategy (Berlin & Mester, 1998; Binks & Ennew, 1997) and suggests such strategies are a form of Porter's (1980) product differentiation strategy. Drawing upon Doz (1996), three important dimensions of bank interface structure are studied (i.e., management continuity, formalization of procedures; and centralization of decisions and authority). Direct effects of strategy and interface structure on each trust dimension were proposed, as well as, interaction effects between strategy and interface structure. Additionally, the study proposed that the three trust dimensions would display different size effects on each of the three customer outcomes.; To test the theoretical framework, data was collected from a matched sample of 867 small business executives and bank managers that had direct responsibility for these accounts. Results suggest that three distinct trust dimensions exist within bank-small firm relationships. These dimensions are: calculus-based trust (i.e., trust grounded in beliefs about a partner's self-interest motivation); knowledge-based trust (i.e., trust grounded in knowledge about a partner's abilities and intentions); and identification-based trust (i.e., trust grounded in social-psychological bonds). Results found that a bank relational strategy and each element of interface structure affected customer trust differently depending on the trust basis. Further, results found that identification-based trust's positive effect on both types of customer satisfaction was greater than that of knowledge-based trust, which in turn was greater than that of calculus-based trust. |
