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Benefits of Cooperation Between Two Similar Firms In An Alliance*  

  Firm One Cooperate Not Cooperate Opportunism
Firm Two        
Cooperate   10, 10 5, 5 2.5, 7.5
Not Cooperate   5, 5 2.5, 2.5 2.5, 0
Opportunism   7.5, 2.5 0, 2.5 0, 0

*The first quantity is for Firm One; the second quantity is for Firm Two.

    H1a:  Trust will be positively associated with alliance success.

    H1b: Trust will be positively associated with the entrepreneurial firm’s perceptions of their partner’s integrity regarding     claimed managerial/technical expertise.

    Ring & Van de Ven (1992) have stated that the trustworthiness of a partner is important due to the need to work with an alliance partner over a sustained period of time.  They use two definitions of trust:  one by Zucker (1986), in which trust is the confidence one has in one’s expectations of the other, and the second by Friedman (1991), in which trust is confidence in the other’s goodwill.  In an earlier article, Van de Ven & Walker (1984) suggest that trust emerges as a result of the degree to which one party judges that another party will fulfill its commitments.  We agree these findings on the emergent nature of trust over time, and condense them into our second hypothesis:

    H2:  The longevity of an alliance will be positively associated with alliance success.

    Trust, we suggest, arises when both parties perceive that the other is providing expertise relevant to alliance success.  If the parties to the alliance perceive that their partner is not providing relevant expertise, trust will be reduced.  Should this occur, the parties might begin to behave opportunistically toward one another, or terminate the alliance altogether.  Therefore, we argue that trust is a result of the confidence each partner has in the other’s provision of knowledge or expertise, and that trust will be reduced when that expertise is not shared cooperatively.  Alliances in which partners hold one another in high esteem because of their complementary skills and expertise should exhibit higher levels of trust among partners.  However, the following statement made by one biotechnology executive indicates that trust alone is insufficient to accrue a source of competitive advantage:

        “[W]hen entering into a relationship it helps matters if you trust the other side, without a doubt.  [But you must also]
        have the technology, you have to be able to deliver what you say you can, … [you] have to be able to meet deadlines.
        It’s a business for heaven’s sake! Trust helps get things kicked off.”

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