Trust-based cooperation relationships between SMEs – are family firms any different?

Matthias Fink

International Journal of Entrepreneurial Venturing, 2010, vol. 1, issue 4, 382-397

Abstract: In current business literature, it has been shown in diverse contexts that committing oneself to maxims based on trust put in one's cooperation partner constitutes a successful entrepreneurial action. Against the backdrop of the growing interest in family firms, it seems worthwhile to ask whether or not this also holds true for this special group of firms. After a short introduction and a brief outline of the theoretical background of the effect of maxim-based trust on firm performance, we discuss the particularities of cooperation relationships of family firms and develop an argumentation on how these special characteristics might strengthen or weaken the performance contribution of maxim-based trust which results in the formulation of two hypotheses. A set of linear regression models and a Mann-Whitney U-test show that maxim-based trust significantly contributes to the performance of cooperating SME in Finland (n= 377), but no significant differences in this effect were detected between non-family firms and family firms. Thus, we can encourage family firms to engage in trust-based cooperation relationships, as this is obviously also an attractive strategy to enhance the performance in family firms.

Keywords: inter-firm cooperation; maxim-based trust; firm performance; family business; comparison; Finland; family firms; cooperation relationships; SMEs; small and medium-sized enterprises. (search for similar items in EconPapers)
Date: 2010
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