TRUST AND THE GOVERNANCE OF INTERNATIONAL STRATEGIC ALLIANCES

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Abstract

The aim of this study is to deepen our understanding of the choice of governance mode in international strategic alliances (ISAs) by examining the relationships between opportunism, trust and equity versus on-equity-based governance of ISAs. Previous studies provide ambiguous results regarding the linkages between opportunism, trust and governance form. To resolve this ambiguity, we identify the separate influences of the relational attributes of the partners, host country macro environmental attributes and characteristics of ISA transactional activities on governance choice in ISAs. Empirical estimation using primary data on international strategic alliances involving Danish firms indicate a particularly strong relationship between attributes of alliance partners and ISA governance mode. Specifically, trustworthiness appears to be a substitute for administrative control. In addition, we find attributes of “host country «governance to be relevant to the choice of ISA governance mode, although relational attributes seem far more important

Keywords: Trust, Governance, International Strategic Alliance

How to cite this paper: Globerman, S., & Nielsen, B. B. (2006). Trust and the governance of international strategic alliances. Corporate Ownership & Control, 3(4-1), 202-218. https://doi.org/10.22495/cocv3i4c1p6