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The Development of Asymmetric Trust in Cooperation Between Large Firms and SMEs: Insights from China

Author

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  • Hongli Wang

    (South China University of Technology)

  • Peter J. Peverelli

    (VU University Amsterdam)

  • Bart A. G. Bossink

    (VU University Amsterdam)

Abstract

This paper describes how asymmetric trust develops and changes in time in cooperative relationships between large enterprises and SMEs in China. A model is developed on the basis of in-depth case studies of cooperation between six SMEs and five large firms in China. The data sources reveal how Chinese SMEs use trusting behavior to overcome trust asymmetry in negotiations in order to exploit business opportunities. This study provides insights into the micro-processes of building trust at three consecutive stages of the cooperation process. For each stage, the paper describes the perception of trust asymmetry of cooperating large firms and SMEs, the trust building behavior of SMEs, and the response to that behavior from large firms. The paper analyzes how large firms and SMEs deal with asymmetric trust to develop long-lasting cooperative relationships.

Suggested Citation

  • Hongli Wang & Peter J. Peverelli & Bart A. G. Bossink, 2015. "The Development of Asymmetric Trust in Cooperation Between Large Firms and SMEs: Insights from China," Group Decision and Negotiation, Springer, vol. 24(5), pages 925-947, September.
    • Handle: RePEc:spr:grdene:v:24:y:2015:i:5:d:10.1007_s10726-014-9422-6
    DOI: 10.1007/s10726-014-9422-6
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    References listed on IDEAS

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    1. Akbar Zaheer & Darcy Fudge Kamal, 2011. "Creating trust in piranha-infested waters: The confluence of buyer, supplier and host country contexts," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 42(1), pages 48-55, January.
    2. John Child & Guido Möllering, 2003. "Contextual Confidence and Active Trust Development in the Chinese Business Environment," Organization Science, INFORMS, vol. 14(1), pages 69-80, February.
    3. Lai Si Tsui-Auch & Guido Möllering, 2010. "Wary managers: Unfavorable environments, perceived vulnerability, and the development of trust in foreign enterprises in China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(6), pages 1016-1035, August.
    4. Srilata Zaheer & Akbar Zaheer, 2006. "Trust across borders," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(1), pages 21-29, January.
    5. Akbar Zaheer & N. Venkatraman, 1995. "Relational governance as an interorganizational strategy: An empirical test of the role of trust in economic exchange," Strategic Management Journal, Wiley Blackwell, vol. 16(5), pages 373-392.
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    Cited by:

    1. James Cunningham & Alistair R. Anderson, 2018. "Inspired or Foolhardy: Sensemaking, Confidence and Entrepreneurs’ Decision-Making," Group Decision and Negotiation, Springer, vol. 27(3), pages 393-415, June.
    2. Martin P. Allmendinger & Elisabeth S. C. Berger, 2019. "Selecting Corporate Firms For Collaborative Innovation: Entrepreneurial Decision Making In Asymmetric Partnerships," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 24(01), pages 1-34, January.

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