Beyond Contracts: The Mediating Role of Trust in Cross-Cultural Supply Chain Performance Between China and Malaysia

As globalization deepens economic interdependence, cross-cultural collaboration in supply chains has become pivotal and increasingly complex. This study investigates the cultural and operational challenges that influence logistics partnerships between Chinese and Malaysian firms. Despite strong bilateral trade relations and strategic joint ventures, collaboration often falters due to contrasting cultural paradigms. Grounded in Transaction Cost Economics, Institutional Theory, and Social Exchange Theory, this research explores how divergent values such as Chinese hierarchical decision making and guanxi-driven trust, versus Malaysia’s participative management style and contractual orientation and impair communication, decision making, and risk-sharing. Using a structured quantitative survey of 108 logistics professionals across China and Malaysia, the study identifies cultural barriers as significant predictors of supply chain inefficiencies. Mediation analysis further confirms trust as a crucial variable linking cultural misalignment to performance outcomes. Case studies enrich the analysis, contrasting a successful Port Klang warehouse partnership with a failed cross-border transport venture. Findings reveal that firms leveraging hybrid management structures, cross-cultural training, and culturally adaptive contracts perform significantly better. The study offers practical frameworks, including a 3 R negotiation model (Respect, Reciprocity, Results) and the CARE Protocol for dispute resolution, to mitigate cultural friction. Ultimately, this research underscores that managing cultural intelligence is not a peripheral concern but a core strategic necessity in international logistics. The results contribute both to the scholarly literature on cross-cultural supply chain management and provide actionable insights for practitioners navigating complex Sino-Malaysian logistics ecosystems.