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The Contextual Influence on International Business Buying Behavior for Commercial Services
October 2002

Over the last two decades, world demand for business-to-business services has increased nearly fourfold to more than $1.4 trillion today (World Trade Organization, 2002).  The growth of professional services, in particular, has been tremendous.  To date, international buying behavior for commercial services has received limited coverage in the literature.  Specifically, the literature has not addressed contextual issues concerning the buyer-seller relationships. 

The literature on buyer behavior emphasizes the importance of the internal decision process for business purchases (Anderson and Chambers, 1985; Spekman and Stern, 1979; Tanner, 1990; Hult and Nichols, 1996).  Little has been done to empirically test the external environment's influence on purchasing behavior (Webster and Wind, 1972; Sheth, 1973; Samli, Grewal and Mathur, 1988).  In most cases, the buyer behavior models do not go beyond acknowledging the influences and complexity of the international business environment.

Understanding the dynamics of a foreign environment is essential for correctly interpreting results of overseas market studies.  For example, a recent study of businesses in Japan finds that they infrequently retain foreign legal services (Martin and Ciano, 2001).  Given the recent liberalization of Japan's Foreign Lawyer Law (Gaikoku Bengoshi ni Yoru Horitsu Jimu no Toriatsukai ni Kansuru Tokubetsu Sochi Ho 66, 1986), one could conclude that businesses customers are less satisfied with the services provided by foreign lawyers.  Surprisingly, businesses report that their level of satisfaction with foreign and Japanese lawyers is about the same.  A closer look at the Foreign Lawyer Law shows that its amendments only permit foreign lawyers to provide a narrow range of legal services.  Despite the recent amendments to the Foreign Lawyer Law, it still serves as a market entry barrier for foreign legal services.

The growing volume of commercial service trade suggests greater opportunities for international business-to-business transactions.  To understand the dynamics of business purchase decisions in foreign markets, contextual analysis is necessary.  Without it, the likelihood of spurious interpretations and conclusions increases. 
 

 
Drew Martin, North Dakota State University