The role of trust and contracts in the internationalization of technology-intensive Born Globals

Authors:
Kirsimarja Blomqvist;Pia Hurmelinna-Laukkanen;Niina Nummela;Sami Saarenketo
Affiliations:
Lappeenranta University of Technology, Finland;Lappeenranta University of Technology, Finland;Turku School of Economics, Finland;Lappeenranta University of Technology, Finland
Venue:
Journal of Engineering and Technology Management
Year:
2008

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Abstract

The purpose of this paper is to study the roles of trust and contracts in technology-intensive Born-Global firms (BGs). By definition these firms compete in the area of knowledge and cutting-edge innovation, use external resources, and internationalize at inception or soon thereafter. For entering global markets successfully, these firms typically need partners. However, attracting them requires disclosing critical knowledge, and thus BGs encounter the risk of losing their potential competitive advantage. Their global business environment is very competitive and dynamic, therefore traditional ways of operating may be too time-consuming to manage these risks. Consequently, we argue that for technology-based BGs, the role of trust and contracts are closely intertwined. The paper puts forward three propositions that highlight the roles of trust and contracting for technology-intensive BGs.