The Role of Trust and Contracts in the Expansion of Technology-Intensive SMEs

Ewa Baranowska-Prokop (ebarano@sgh.waw.pl) and Jacek Prokop (jacek.prokop@sgh.waw.pl)
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Ewa Baranowska-Prokop: SGH Warsaw School of Economics

Chapter Chapter 14 in Applied Economic Research and Trends, 2024, pp 235-243 from Springer

Abstract: Abstract The main objective of this chapter is to provide an insight into the collaboration between technology-intensive small- and medium-sized enterprises (SMEs) and a large multinational firm. In this context, the role of trust and contracts has been assessed. It is argued that technology-intensive SMEs have to rely on trust with large multinational companies. However, it is crucial to have some mechanism that enables small firms to attract a large company to be committed to a stable relationship with a smaller partner. Such a mechanism is demonstrated by a simple model of profit sharing which may allow to develop a trustworthy collaboration between asymmetric partners.

Keywords: Trust; Contracting; Technology-intensive SMEs (search for similar items in EconPapers)
JEL-codes: L14 L25 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-49105-4_14

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DOI: 10.1007/978-3-031-49105-4_14

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