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

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 tech nology-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. (C) 2008 Elsevier B.V. All rights reserved.