Empirical Investigations of Trust and Trust Building in Uncertain Circumstances
Edited by Katinka Bijlsma-Frankema and Rosalinde Klein Woolthuis
Chapter 3: Formation of Trust in German–Mexican Business Relations
3. Formation of trust in German– Mexican business relations1 Torsten M. Kühlmann INTRODUCTION Since the 1980s, cross-border business cooperation has gained momentum as a third form of internationalization besides direct exports and the acquisition or foundation of foreign subsidiaries (Contractor and Lorange 1988). Over the years different forms of international cooperative arrangements have been established, such as strategic alliance, joint venture, contractual production, licensing or marketing partnership. In particular this trend is sustained by small and medium-sized companies (SMEs) that try to compensate for their disadvantage of scarce resources (for example ﬁnance, know-how, management capacity) by employing cooperation strategies in their efforts for internationalization (Weber and Kabst 2000). Yet cooperative interﬁrm relationships which cross national borders are difﬁcult to manage and tend to show high failure rates. In order to explain the widespread break-up of international business cooperation, management scholars have repeatedly argued that mutual trust is of paramount importance for cross-border collaboration to be successful (Aulakh et al. 1996; Ariño et al. 2001; Child 2001; Currall and Inkpen 2002; Sako 1998). The importance of trust stems from the interdependence of cooperating partners and the behavioural uncertainty inherent in any cooperation (Seifert 2001). Interdependence is characteristic for a cooperation because the goals of one partner can only be obtained depending on the cooperating partner’s choice of means, which takes the interests of both parties into consideration. Cooperating partners depend on the longstanding existence of the collaboration, because they make transaction-speciﬁc investments that only pay off...
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