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India, business-to-business, negotiations, power distance, social formalities
India is one of todays most important emerging economies, and as its market becomes more significant for multinational companies, it becomes more imperative that foreign firms identify those factors that contribute to successful negotiations. This study proposes and empirically tests a framework that measures the impact of social formalities and power distance on business relationships in India. The model shows that power distance sets the stage for negations, and the respect for social formalities sets a tone of mutual reference and understanding that will facilitate the establishment of a foundation for long-term business relations.