The purpose of this study is to investigate what factors make the relationships between Korean firms and their Canadian counterparts good or bad, particularly within the context of international trade. This study suggests that the factors affecting the quality of business relationship and relationship performance include relational norms, formalization, and market uncertainty. It also proposes that relational norms are determined by trust, relationship investment, and continuity experience. Data was collected through a mail survey of 412 Korean exporting firms which have transaction relationships with Canadian companies. Data strongly supports the research hypotheses. As hypothesized, the results of data analysis show that relational norms and formalization tend to enhance relationship quality and relationship performance. The impact of formalization is only moderate, however. In addition, we notice that relationship quality and relationship performance seem to decrease as market uncertainty increases. Data also supports the hypotheses regarding the determinants of relational norms. Trust, relationship investment, and continuity experience tend to induce the development of relational norms.

• Jong Hoon Kim