Environmental and Firm Level Influences on Inter-Organizational Trust and SME Performance

Journal of Management Studies, Forthcoming

53 Pages Posted: 25 Jan 2011

See all articles by Ajai Gaur

Ajai Gaur

Rutgers Business School - Newark and New Brunswick

Debmalya Mukherjee

University of Akron - College of Business Administration

Sanjaya S. Gaur

Auckland University of Technology - AUT School of Business - Faculty of Business and Law

Florian P. Schmid

Roland Berger Strategy Consultants

Date Written: January 24, 2011

Abstract

We investigate the effects of focal firm knowledge intensity and uncertainty on inter-organizational trust and subsequent performance of small and medium size enterprises (SMEs). We integrate the trust literature with transaction cost literature as both these offer partial explanations of the dynamics of inter-organizational trust in the context of a SME. We propose that knowledge intensity of the focal firm will have a positive relationship while uncertainty will have a negative relationship with inter-organizational trust in an exchange relationship. Further, we propose a positive relationship between trust and SME performance, which will be contingent on the level of external and internal uncertainty faced by the focal firm. Empirical evidence, based on the survey data of 565 German SMEs mostly supports our arguments.

Suggested Citation

Gaur, Ajai S. and Mukherjee, Debmalya and Gaur, Sanjaya S. and Schmid, Florian P., Environmental and Firm Level Influences on Inter-Organizational Trust and SME Performance (January 24, 2011). Journal of Management Studies, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1747247

Ajai S. Gaur (Contact Author)

Rutgers Business School - Newark and New Brunswick ( email )

Newark, NJ
United States

Debmalya Mukherjee

University of Akron - College of Business Administration ( email )

Sanjaya S. Gaur

Auckland University of Technology - AUT School of Business - Faculty of Business and Law ( email )

Rm# 304, Level 3, WU Bldg, 46 Wakefield Street
Private Bag 92006
Auckland, 1010
New Zealand
+64-21-536263 (Phone)
+64-9-9219629 (Fax)

HOME PAGE: http://www.aut.ac.nz/profiles/sanjaya-singh-gaur2

Florian P. Schmid

Roland Berger Strategy Consultants ( email )

Germany

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